Greek cabinet backs referendum proposal

A marathon cabinet meeting has concluded with ministers expressing unanimous support for prime minister George Papandreou’s surprise decision to call for a referendum on a hard-won European plan to rescue the Greek economy, a government spokesman said.

Ilias Mossialos said early today that the referendum will be held “as soon as possible” once the basics tenets of the debt agreement have been reached.

Earlier, Mr Papandreou said the referendum would be on the debt deal, Greece’s European course and its participation in the euro currency used by 17 European Union nations.

Mr Papandreou’s referendum announcement was strongly criticised across Europe and caused stock markets around the world to plunge.