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Greece mulls gov't confidence vote

The Associated Press

ATHENS -- Lawmakers in Greece have begun debating a confidence vote on Prime Minister George Papandreou's government that was called after he suddenly proposed a referendum on the EU bailout deal for the country.

The vote could topple his Socialist party government, which has only a two-seat majority in the 300-member Parliament.

The debate is scheduled to last for three days, with a vote sometime Friday.

Several prominent Socialists also are calling for early elections, angry at how austerity measures are being imposed by their own government during the country's financial crisis.

Papandreou, meanwhile, was traveling to Cannes, France, to explain himself to European leaders angry over his surprise referendum on a bailout deal that took them months to work out.

Papandreou's pledge to let the Greek people vote on the deal has roiled financial markets and threatens to derail an entire European debt crisis plan that's not even a week old. Observers called it a "back me or sack me" move to make sure the Greek public will support the severe austerity measures looming ahead.

But a "no" vote in the referendum would have enormous consequences not just for Greece but for the rest of Europe. It could lead to a disorderly Greek default, force Greece out of the 17-nation eurozone, topple many fragile European banks and send the global economy spinning back into recession.

With that in mind, French President Nicolas Sarkozy, German Chancellor Angela Merkel and top European Union officials gathered at the Palais des Festivals, site of the Cannes film festival, for private emergency talks ahead of a meeting with Papandreou.

The pressure on Papandreou was mounting. European leaders "will not accept" it if Greece jeopardizes the rescue plan, Luxembourg Prime Minister Jean-Claude Juncker said after the first round of talks.

"All 17 of us made decisions a week ago," he said, urging Greece not to "dissociate itself" from those decisions. "The situation is serious."

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