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UPDATE (7:25 AM): Now we’re hearing back-and-forth reports that Papandreou might submit his resignation today.We’re not sure yet whether there’s any truth to that rumour, but it somehow doesn’t seem unlikely.
PREVIOUSLY: Bloomberg is reporting that Greek PM George Papandreou may withdraw his referendum proposal after all, citing a government source.
The likelihood of a referendum has been looking ever slimmer, after Greek Finance Minister Evangelos Venizelos wrote a scathing letter about the proposal and Papandreou lost his majority in parliament.
This could amount to a last-ditch effort to rescue his political career, as it is highly likely that he will no longer gain the necessary votes in Parliament to uphold his government.
He could also be succumbing to pressure from German Chancellor Angela Merkel and French President Nicolas Sarkozy. Sarkozy gave an ultimatum to Greece, threatening to kick Greece out of the euro if it did not stick to the bailout deal reached last week.
They’ve also been vehement in their insistence that — if a referendum is the outcome — it will be on participation in the euro economic and monetary union and not on the terms of the second bailout.