European bullying forces Papandreou out

Every time you look there's a new development!

From Mish Shedlock:

“It is exceptionally difficult to keep up with news stories in Europe. Every minute there is a new twist. What's clear is that no one is in charge, of anything”.

The news as of 9.30 EDT

Greek PM ready to go, dump referendum, for euro deal

(Reuters) - Intense European pressure forced debt-stricken Greece to seek political consensus on a new bailout plan instead of holding a referendum after EU leaders raised the prospect of a Greek exit from the euro to preserve the single currency.

Fast-moving events in Athens overshadowed the first day of a summit of the Group of 20 major economies on the French Riviera on Thursday, with anxious world leaders urging Europe to act to stop contagion from its sovereign debt crisis.

Greek Prime Minister George Papandreou bowed to cabinet rebels and agreed to step down and make way for a negotiated coalition government if his Socialists back him in a confidence vote on Friday, government sources told Reuters.

"He was told that he must leave calmly in order to save his (PASOK) party," one source said on condition of anonymity. "He agreed to step down. It was very civilized, with no acrimony." ......

ITALY NEXT

Italy was next in the euro zone firing line, facing fierce pressure to make good on long delayed economic reforms.

European G20 leaders along with U.S. President Barack Obama, IMF Managing Director Christine Lagarde and new ECB President Mario Draghi met on the sidelines to press Italian Prime Minister Silvio Berlusconi for a timetable for key labor market, pension and privatization measures, EU sources said.

Berlusconi failed to win agreement from his divided center-right cabinet for the reforms just before flying to Cannes.

A draft plan agreed with the G20 on Thursday includes a commitment by Italy to get its budget deficit "near balance" by 2013 and to rapidly reduce its debt-to-GDP ratio, sources told Reuters. That is less ambitious than Italy's promise only last month to balance its budget in 2013.

EU leaders are concerned that if Italy cannot get its finances in order, the economy -- the eurozone's third largest -- could go the way of Greece, Ireland and Portugal in needing a bailout from the EU.

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