Greece to hold referendum on new debt deal

Anti-austerity protesters clash with riot police as they try to approach officials' tribune during a parade in the city of Iraklio, on the Greek islnad of Crete, Friday, Oct. 28, 2011. In several Greek cities, officials were heckled but the commemorative parades went ahead as scheduled, two days after Europe's leaders announced a strengthened financial rescue plan that includes bigger write-downs of Greek debt and new injections of capital into weakened European banks. (AP Photo)

ATHENS, Greece (AP) — Greece's Prime Minister George Papandreou on Monday said his troubled country will hold a referendum on a new European debt deal reached last week — gambling on a hard-bargained agreement that took months to hammer out.

Papandreou appeared to take many lawmakers by surprise with the announcement. He gave no date or other details on the proposed referendum, which would be the first in Greece since 1974, when the monarchy was abolished by a landslide vote held months after the collapse of a military dictatorship.

"This will be the referendum: The citizen will be called upon to say a big 'yes' or a big 'no' to the new loan arrangement," Papandreou told Socialist members of parliament.

"This is a supreme act of democracy and of patriotism for the people to make their own decision ... We have a duty to promote the role and the responsibility of the citizen."

The new deal aims to seek 50 percent losses for private holders of Greek bonds and provide the troubled eurozone member with euro100 billion ($140 billion) in additional rescue loans.

Papandreou's government has seen its majority reduced to just three seats in parliament and its approval ratings plummet amid harsh austerity measures that are likely to send the country into a fourth year of recession in 2012.