Berlin denies Greek statement

A spokeman for German Chancellor Angela Merkel denied late yesterday that she had suggested Greece hold a referendum on its euro membership alongside general elections next month, as claimed by Athens.

It is clear that the matter is beyond the competence of the caretaker government

“The information reported that the chancellor had suggested a referendum to the Greek President Carolos Papoulias is wrong,” said the spokesman.

Earlier yesterday the Greek caretaker prime minister’s office said that Mrs Merkel had suggested that Greece hold a referendum on its euro membership alongside general elections next month.

In a phone call with President Papoulias, Mrs Merkel had “conveyed thoughts on holding a referendum alongside the election, on the question of whether Greek citizens wish to remain in the eurozone,” a statement said.

“However, it is clear that the matter is beyond the competence of the caretaker government,” said the office of Prime Minister Panagiotis Pikrammenos, a senior judge appointed premier on Thursday with the sole task of holding elections in June.

Mrs Merkel had previously strongly opposed the idea of a Greek referendum when it was proposed in October by Greece’s then prime minister, the Socialist George Papandreou.

Mr Papandreou was forced to resign soon afterwards after a backbencher revolt over the terms of a tough EU-IMF debt accord which included harsh austerity measures.

Greek voters rejected those painful spending cuts and tax hikes in a May 6 poll and could do so again on June 17, raising concerns about the fate of the €237 billion EU-IMF bailout package.

Meanwhile the EU’s Trade Commissioner Karel De Gucht said yesterday that the commission and European Central Bank had begun “emergency” planning in case Greece defaults.

He did not specify whether this also concerned a possible exit from the eurozone. “Today, whether within the European Central Bank or the European Commission, services are studying emergency scenarios where Greece cannot manage,” Mr De Gucht told Flemish daily De Standaard in comments translated into French by national news agency Belga.

Mr De Gucht said officials in both institutions were preparing plans that would minimise any “domino effect,” which he said was a “danger” 18 months ago, although he also suggested that the issue may yet be put to a referendum among the Greek people if June 17 polls were again inconclusive.