November 3, 2011
Greece's government was on the brink of collapse on Thursday, casting doubt on plans to hold a referendum on staying in the euro zone, as European leaders contemplated a Greek exit to preserve their single currency.
Prime Minister George Papandreou chaired an emergency cabinet meeting in Athens, with his finance minister in revolt against a plebiscite, after the leaders of France and Germany gave Greeks an ultimatum to make up their minds.
French President Nicolas Sarkozy and German Chancellor Angela Merkel told Papandreou at a torrid meeting in Cannes that Athens would not receive a cent more in aid until it votes to meet its commitments to the euro zone. Greece was due a vital 8 billion euros installment this month.
The political chaos in Greece and uncertainty over the euro zone sent stocks and commodity prices lower in Asia, and fueled a rush into safe-haven German bonds. But financial markets rallied in nervous trading as the likelihood grew that Greece would not hold a highly risky referendum.
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