Germany warns Greece over rescue

The eurozone plan to save Greece from bankruptcy is not up for renegotiation, Germany has warned, ahead of emergency talks with Greece and France.

“[What] we just agreed last week cannot be placed back on the table,” Foreign Minister Guido Westerwelle said.

Greek PM George Papandreou is to meet France’s Nicolas Sarkozy and Germany’s Angela Merkel later on Thursday.

The meetings come a day after Mr Papandreou said Greece would hold a referendum on the eurozone rescue plan.

Overnight, Greece’s cabinet gave unanimous backing to Mr Papandreou’s controverisial plan for a public vote, which could take place in December.

He told an emergency cabinet meeting a referendum would offer “a clear mandate” for austerity measures demanded by eurozone partners.

Earlier, stock markets recorded big drops amid shocked reactions in eurozone capitals to the referendum announcement.

‘Appalled by uncertainty’

BBC diplomatic correspondent James Robbins, in Cannes for the G20, says the summit of global leaders has been thrown into confusion before it even opens.

President Sarkozy had thought the priority would be presenting to the wider world a done deal for the Eurozone rescue and asking for active international support, particularly from China.

But instead, Mr Papandreou’s move has left Mr Sarkozy, and German Chancellor Angela Merkel appalled by the uncertainty, and the damage already done, our correspondent says.

Mr Papandreou is expected to say that he had no choice: a referendum was vital to try to overcome resistance on the streets to deepening cuts – and a possible alternative of snap elections would risk Greece defaulting on its debt.

Furthermore, the Greek government faces a crucial confidence vote in parliament on Friday.

One MP from the governing Pasok party has resigned, cutting Mr Papandreou’s parliamentary majority to two – and six other leading party members have called on him to resign.

The planned referendum threatens to unravel a deal reached at a EU summit last week aimed at resolving the euro debt crisis.

Leaders agreed on a 100bn-euro loan (£86bn; $140bn) to Athens and a 50% debt write-off.

But in return, Greece must make deep cuts in public spending, slashing pensions and wages and making thousands of civil servants redundant.

There have been widespread protests in Greece against the measures.

Three-way talks

On Tuesday, President Sarkozy said Mr Papandreou’s decision “surprised all of Europe”.

The French and German governments said they wanted “full implementation” of the agreement “in the quickest time-frame”.

In a joint statement, President Sarkozy and Chancellor Merkel said the decisions taken by last week’s EU summit were “more necessary than ever”.

“France and Germany are convinced that this agreement will allow Greece to return to sustainable growth,” they said.

Last week’s marathon EU summit was intended to rescue Greece and bring the 17-nation eurozone back from the brink of disaster.

The chairman of the group of eurozone countries, Jean-Claude Juncker, said if a referendum rejected the bailout, it could mean bankruptcy for Greece.

“It will depend on the manner in which the question will be exactly formulated and on what the Greeks exactly vote on,” he said.

After Wednesday’s meeting in Cannes, Mr Papandreou faces a difficult confidence vote on Friday with some of his own MPs openly calling for his resignation.

The BBC’s Europe editor Gavin Hewitt says that if he loses, elections almost certainly would follow, ushering in a period of uncertainty and instability.

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