UPDATE: Germany Denies Asking Greece To Hold A Referendum On The Euro

george papandreou

Photo: AP Images

ORIGINAL: According to a premier cited by Bloomberg and a tweet from Dow Jones, German Chancellor Angela Merkel now supports the idea of a Greek referendum on its membership in the eurozone.Oddly enough, this is similar to former Prime Minister George Papandreou’s proposal that Greece have a referendum on austerity measures and euro membership last November. Merkel and other EU leaders condemned this move, which would have put those economic reforms in jeopardy.

The move proved the end of Papandreou’s political career—at least to date.

Evidently she’s now playing the other side, banking on the approximately 80 per cent of Greeks that are said to approve of euro membership to prize the currency over the pain that will be inflicted by another round of spending cuts in the next two years.

This development comes amid overwhelming support for political parties that oppose the bailout in a failed round of parliamentary elections, most prominently the left-wing SYRIZA. That party has appeared to gain momentum among voters since they went to the May 6 polls, despite some whispers that this support could be fading.

Bloomberg also reports that Antonis Samaras, chief of the New Democracy party which earned the most votes in the May 6 elections, called the proposal “unfortunate.” The SYRIZA party also seems to oppose the referendum, saying that Merkel is treating Greece like a “protectorate,” according to Dow Jones.

PASOK MP Eva Kaili told Business Insider the referendum “won’t and can’t happen. It is ironic and it is blackmail.”

Ironically, this appears to be a reversal of the Greek and EU positions last fall.

UPDATE (2:15 PM ET): According to the Greek Mega TV, the German government is denying that Merkel made such proposal for a referendum to Greek President Karolos Papoulias.

GET READY: This Is What Happens If Greece Exits The Euro >

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