World and Nation

Greek leader calls off referendum on bailout plan

ATHENS, Greece — In a tumultuous day of political gamesmanship, Prime Minister George A. Papandreou on Thursday called off a referendum on Greece’s new debt deal with the eurozone after winning a measure of support from his opposition and managed to repair, at least for a day, a major rupture in relations with Europe.

The decision to abandon his idea of holding a popular vote on the European debt deal did not end the political turmoil here; Papandreou still faces a rebellion in his own Socialist Party and the fury of some opposition figures, and he will have to weather a difficult confidence vote Friday. But talk of a possible unity government eased international fears of immediate new elections and a looming default if he did not survive in office, cheering markets in Europe and abroad.

In an address to his party’s central committee Thursday evening, Papandreou said there was no need for a referendum now that the opposition New Democracy Party had said for the first time that it would back the agreement, reached last week, to write down Greek debt in exchange for austerity measures and a commitment to the euro as the nation’s currency.

The prime minister invited the New Democracy Party to become “co-negotiators” on the deal and later said that talks on a unity government should begin immediately. He also suggested that he would be willing to step aside so that others could form a unity government if he won Friday’s confidence vote.

“I am not clinging to my seat,” he said.

He made those comments after the New Democracy leader, Antonis Samaras, accused the prime minister of “deception.” Samaras was angry that Papandreou appeared to be trying to hold on to his post after securing the opposition’s cooperation.

Papandreou’s decision to call off the referendum followed three days of political volleyball that whipsawed world markets, shook the Continent to its foundations and drove angry European leaders to issue an ultimatum Wednesday demanding that Greece decide once and for all if it wanted to remain a part of the European Union and its currency bloc, the eurozone.

But after a day of political horse-trading, Greece’s political storm began to look less like points of departure for Europe than hastily considered parliamentary maneuvers by a prime minister who was looking for a way to shore up support with both the Socialists and the opposition — or to negotiate a graceful exit. As has happened so often in the euro crisis, the fate of the European enterprise seemed to hinge on the political machinations of one of the union’s smallest members.