European markets plunged as Greece’s Prime Minister Papandrou, who agreed to the EU bailout deal last Wednesday, tossed a coin by calling for a referendum on Europe’s bailout plan. The move puzzled investors and European leaders alike. While, after analysis, the EU rescue would in all likelihood only delay Greece’s default, this move by the Prime Minister has investors looking at the motive. Papandrou faces a confidence motion on Friday.s
The German government in Berlin has announced that there would be a pre G20 special summit in Cannes, France on Wednesday to discuss the new developments. German Chancellor Angela Merkel will be holding a teleconference with Nicola Sarkozy of France, prior to the summit, to discuss the crisis, Die Welt on line reported.
Papandrou stunned investors, his citizens and European leaders in his decision to hold a referendum on the deal, which he called a supreme act of democracy. Markets soared last week after Europe brokered a deal, which would forgive 50% of Greece’s debt. This enthusiasm was short lived and analysts soon wondered if the deal would do much more. but delay the inevitable default by Greece. Austerity
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