–Adds Comments By Papandreou Confirming Contents, Date Of Referendum

CANNES, France (MNI) – The Greek referendum will be about whether
Greece is going to stay in the Eurozone, Eurogroup Chairman Jean-Claude
Juncker said late Wednesday.

Speaking to reporters after a meeting here, Juncker said the exact
wording would be up to the Greek government but that the basic question
was whether Greek’s wanted to continue using the euro.

France’s President Nicolas Sarkozy and Germany’s Chancellor Angela
Merkel, speaking at a press conference moments later, echoed Juncker’s
comments. “The referendum must be on whether Greece is to remain the
euro,” Merkel said. Sarkozy said “it is up to the Greek people whether
to remain in the euro,” later adding that he trusted them to “make the
right choices.”

Greek Prime Minister George Papandreou, who was the last to speak,
also told reporters, “this is question of whether we stay in the
Eurozone,” though he declined to say what the precise wording of the
referendum would be. He said he believed the referendum would be held on
December 4.

The ratcheting up of the stakes in the referendum came after
Papandreou met earlier this evening with Sarkozy, Merkel, Juncker, IMF
chief Christine Lagarde and two other top European Union officials.

French media had reported earlier in the day that Sarkozy, Merkel
and the other officials in the meeting planned to tell Papandreou that
the referendum must be held before the end of the year and must focus on
the bottom line question. They rejected the idea of holding a referendum
on the details of last week’s EU summit plan for a second Greece
bailout, which included E130 billion in new official sector money and a
50% writeoff on Greece’s privately held sovereign debt.

They reasoned that if the Greeks voted against that deal, they
would not receive any more financing from the EU or the IMF and would
ultimately be forced out of the euro area anyway. So, the thinking went,
why bother with the intermediate questions.

Juncker said Greece had “lost” an E8 billion loan tranche,
previously approved by the Eurozone finance ministers, because of the
referendum. Whether they end up getting the money will now depend on
whether Greeks say “yes” or “no” in the referendum, he said.

Since Papandreou announced his referendum plan on Monday night, the
crisis has flared up dangerously, with markets driving down the value of
the euro and of banking stocks, while pushing borrowing costs for other
peripheral Eurozone countries — especially Italy — to new highs.

Officials said there will be a kind of mini-EU summit here Thursday
morning between the leaders of France, Germany, Italy and Spain. France
and Germany fear that with their counterparts in Rome and Madrid now in
the crosshairs of the markets, the fallout from the latest events
surrounding Greece could have dire consequences, driving them straight
in the arms of Europe’s bailout fund, the EFSF.

To avoid the scenario of a forced bailout for Spain or Italy, which
the EFSF could clearly not afford at this juncture, Sarkozy and Merkel
want to meet with their counterparts, Italian Prime Minister Silvio
Berlusconi and Spanish Premier Jose Luis Rodriguez Zapatero to try and
convince them to implement more fiscal austerity measures. Such
measures, they hope, will help keep the financial markets at bay.

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