French President Nicolas Sarkozy has slammed Greek Prime Minister George Papandreou for proposing a referendum on the plan agreed upon by European leaders last week, saying this is "the only way" to fix the country's debt.

The referendum proposal "surprised all of Europe," Sarkozy told reporters in Paris.

"The plan adopted unanimously by the 17 members of the euro area last Thursday is the only possible way to resolve the problem of Greek debt," he said.

Sarkozy will meet on Wednesday with German Chancellor Angela Merkel, officials from the International Monetary Fund and European institutions to discuss the Greek situation.

The gathering will take place at 5:30 p.m. in Cannes, France, before a meeting Chinese President Hu Jintao and then Papandreou later in the evening. Group of 20 leaders gather in Cannes the following day.

European stock exchanges were shocked by the announcement of Greek PM George Papandreou that the country will hold a referendum on its latest bailout deal.

Before mid-day Tuesday, the Frankfurt DAX index had fallen with 4.01%, French CAC - with 3.37, London FTSE - with 2.4%, while the ATHEX index for the Athens exchange sunk with 5.96%.

Analysts have commented that news of the referendum had sent "shockwaves" across stock exchanges, raising fresh notes of pessimism regarding the debt crisis in Europe.

Greek PM George Papandreou asked Parliament Monday for a vote of confidence, and suggested that a referendum be held early 2012 for the EUR 130 B bailout package, which is tied to drastic austerity measures.

Opposition concervative New Democracy Party leader Andonis Samaras on Tuesday resolutely opposed the referendum proposal, saying it imperiled the situation in Greece, and called for early elections.

Meanwhile, the European Commission has stated it has not been informed by Greek authorities regarding the intention to hold a referendum on the aid package.

Last week EU leaders agreed to remit 50% of the massive Greek debt in return of widescale austerity measures geared to tame in the financial crisis that has gripped the country and has threatened the eurozone.

This has provoked the latest upsurge in popular protests across Greece, with citizens taking on to the streets against what they see as punitive and unfair job and spending cuts.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!