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Tsipras' Greek referendum is divisive: Papandreou

Greek Prime Minister Alexis Tsipras did not need to call a referendum on a deal with the country's creditors because there is already wide consensus for an agreement, former Prime Minister George Papandreou, said Tuesday.

"He has proposed something which now is dividing the Greek people because there is a wider consensus for an agreement. But he is saying, as government, don't vote for this," he said during an interview on CNBC's "Squawk Alley."

Tsipras on Friday surprised the world with a call for a snap referendum scheduled for this Sunday on his country's bailout package and austerity measures. The announcement came as Greece sought to reach an agreement on a reform-for-aid deal that would allow Greece to make a 1.5 billion euro ($1.7 billion) payment due to the International Monetary Fund at the end of the day Tuesday.

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Papandreou, who held Greece's highest office for two years, also sought to hold a national referendum in 2011. He said his plan was different, calling the current measure Greeks will vote on a "nonagreement" and saying it affords insufficient time for debate.

"I always wanted the Greek people to have an ownership of the program," he said. "Had we done that in 2011, I think we would have been out of the woods now. We would have had a wider consensus, a mandate to make the changes in Greece to move forward."

European Union leaders pressured Papandreou to scrap the referendum, and shortly after doing so, he resigned as part of an agreement that paved the way for a new unity government. That coalition was in turn replaced by one dominated by Tsipras' anti-austerity Syriza party earlier this year.

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Papandreou said Greeks face a difficult choice because, on the one hand, five years of austerity and seven years of recession have resulted in 50 percent youth unemployment and a 25 percent contraction in Greece's economy. On the other hand, he said, it would be patriotic for Greeks to vote "yes" because it represents the best way to stay in the "strong core" of Europe, which is in the nation's best interest.

He said the EU bears some blame for the current situation. The emphasis on austerity rather than reforms and the European Central Bank's failure to launch quantitative easing measures until recently put Greece in a much more difficult situation, he said.