Greece to Hold Referendum on New Debt Deal
Excerpt:
Prime Minister George Papandreou announced Monday night that his Socialist government would hold a rare national referendum on a new debt agreement for Greece that was hammered out with the country’s foreign creditors last week, raising questions about Greece’s ability to follow through on its part of the hard-won deal to stabilize the euro.
The surprise announcement, made to lawmakers in Athens, again chained the health of the European Union to Greek domestic politics. Standard & Poor’s 500-stock index fell almost 2.5 percent and the Dow Jones industrials fell about 2.3 percent. European markets, which closed before the announcement, were also down sharply on Monday.
Mr. Papandreou said that the decision on whether to adopt the deal, which includes fresh financial assistance for the country but also imposes unpopular austerity measures, belonged to the Greek people. “Let us allow the people to have the last word, let them decide on the country’s fate,” he said, describing the vote ahead as “an act of patriotism.”
The move effectively pushes responsibility for painful economic choices from the Socialist party onto the public.
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Image source.
Score card for Eurozone debt crisis. Screen shot below
Prediction: Referendum will fail. Crisis will escalate.
