Yikes. Stocks across the EuroZone are down more than 3% after the Greek Prime Minister George Papandreou called for a referendum on the recently crafted EU bailout deal. The deal would significantly reduce Greece's debt burden in return for a globalist austerity program that would be imposed on the Greeks.
“We have faith in our citizens, we believe in their judgment and therefore in their decision. All the country’s political forces should support the (bailout) agreement. The citizens will do the same once they are fully informed” said Papandreou late Monday.
If the Greek electorate vote down the latest EU deal, Greece will go into a "hard default".
“The PM is under heavy pressure from his own party to step down and from the opposition to call for new elections” said Jan Poser, the chief economist at Sarasin in Zurich said following news of the referendum, according to CNBC.
“By threatening a referendum, Papandreou takes a huge gamble. Faced with a stark choice between sovereign default and a EU rescue package, he believes that the people will give him the support” said Poser.
But, if the Greeks go for a hard default, conatgion will surely kick in and threaten Spain, Italy and possibly France, if they aren't immediately protected.
It is utterly amazing that EuroZone leaders would announce a bailout plan and not have Papandreou locked down.