The leaders of Germany and France told Greece tonight it would not receive another cent in European aid until it decides whether it wants to stay in the euro zone.
At talks in Cannes ahead of a G20 meeting, they also made clear that saving the euro was ultimately more important to them than rescuing Greece.
After emergency talks with Greek Prime Minister George Papandreou, German Chancellor Angela Merkel said: "We would rather achieve a stabilisation of the euro with Greece than without Greece, but this goal of stabilising the euro is more important."
Sarkozy hammered home the same message, telling a joint news conference with Merkel: "Our Greek friends must decide whether they want to continue the journey with us."
Papandreou outraged European partners and caused panic on financial markets by announcing on Monday that Greece would hold a referendum on a second bail-out plan negotiated with euro zone leaders last week.
The Greek leader said the vote would take place around December 4. “It's not the moment to give you the exact wording, but the essence is that this is not a question only of a programme, this is a question of whether we want to remain in the euro zone," Papandreou said.
Despite opinion polls showing a majority of Greeks, weary of two years of deepening austerity, think the bail-out package was a bad deal for Greece, he said he expected more support from the wider population than he could muster in parliament.
Sarkozy and Merkel said euro zone finance ministers would meet next Monday to speed up decisions on leveraging the euro zone's rescue fund to build a firewall to protect other weaker members of the 17-nation currency area.
The EU and IMF said Greece would not receive an urgently needed €8 billion aid slice, due this month, until after the vote because official creditors wanted to be sure Athens would stick to its austerity programme.
European Commission President Jose Manuel Barroso delivered this message to Papandreou before his arrival in Cannes, EU sources said.
This was after the Greek leader sent a letter to EU leaders saying he wanted to negotiate the details of the second package before the referendum, they said. The letter angered European officials, raising the level of mistrust towards Greece.
Papandreou said Greece had enough money to keep running until mid-December, when it has to redeem more than €6 billion in debt.
Asians anxious about European crisis
Asian G20 members piled pressure on Europe to tackle the crisis before it wreaks serious harm on the world economy.
China's deputy finance minister, Zhu Guangyao, said he hoped the uncertainty over the Greek referendum could be contained, adding that Beijing could not consider investing more in the euro zone's bail-out fund given the lack of detail on proposals to leverage it.
South Korean President Lee Myung-bak said the G20 must act swiftly and boldly to contain the crisis, which was spilling over to the rest of the world.
If Papandreou loses the referendum, Greece faces a disorderly default which would hammer Europe's banks and threaten the much larger economies of Italy and Spain, which the euro zone may not have the means to bail out.
The chairman of euro zone finance ministers, Jean-Claude Juncker, said Greece could go bankrupt if voters rejected the bailout package and Japanese Finance Minister Jun Azumi said: "Everyone is bewildered."
Juncker, Barroso, European Council President Herman Van Rompuy, IMF chief Christine Lagarde and a senior European Central Bank official attended tonight’s talks in France.
