Tuesday, November 1, 2011
Greek Prime Minister George Papandreou risks a new euro zone crisis with his shock announcement that he will put the bailout deal struck last week to try to contain the bloc’s debt mountain to a referendum of voters already angry at harsh cuts.
Euro zone leaders agreed to hand Athens a second, 130-billion-euro bailout and a 50-percent write-down on its enormous debt to make it sustainable.
Papandreou, whose ruling Socialist party has suffered several defections as it pushes waves of austerity measures through parliament while protesters rally outside, said he needed wider political backing for the fiscal measures and structural reforms demanded by international lenders.
“If there was to be a referendum, we may reasonably conclude that they may not accept the austerity measures. We may conclude that it will bring the pack of cards tumbling down,” Howard Wheeldon, senior strategist at BGC Partners in London, said.