The BBC are reporting that the Greek Prime Minister George Papandreou is to offer his resignation to be replaced by a coalition government, led by former Greek central banker Lucas Papademos. It is unclear but seems likely that this will prevent the referendum on Greece accepting the latest deal on its debts. Fortunate that: Nicolas Sarkozy and Angela Merkel could not have pesky Greek democracy getting in the way of their plans could they? Already the European Commission had said that if Greece left the European single currency, it would have to leave the European Union as well. “The treaty doesn’t foresee an exit from the eurozone without exiting the EU,” spokeswoman Karolina Kottova told a briefing in Brussels.
Update: The BBC have just updated their report to say that Greek TV have now announced that Mr. Papandreou has ruled out resigning.