We thought we'd stop hearing about Greece for a while after last week's machinations stiffed the current holders of Greek debt (such as all the clients of the previous NJ governor) while dumping even more money down the Greek toilet. Not so fast there Batman....
Greek Prime Minister George Papandreou announced this morning that he was calling a referendum and a vote of confidence. All those market gains from last week's presumed stability were wiped out, and the DJIA futures suddenly dropped to -275 or so.
Chances are decent that he will lose, and a new government will need to be formed. To no one's surprise, European leaders who worked out last week's deal aren't very happy.
The decision to call a referendum on the five-day-old bailout blindsided Greece’s European partners and placed another hurdle in the way of efforts to staunch the debt crisis, German coalition lawmakers said.
The announcement came “out of the blue, it’s surprising, very risky,” Norbert Barthle, the ranking member of Merkel’s Christian Democratic Union party on parliament’s budget committee, said by phone today. French President Nicolas Sarkozy is “dismayed” by the Greek plan, Le Monde newspaper reported, citing unnamed people close to Sarkozy.
The following paragraph really seems to sum up the problem. A significant number of Greek people want to continue to be bailed out without having to sacrifice anything themselves. How can you read this any other way? See here for more info on the poll referenced below.
Most of the 1,009 people surveyed on Oct. 27, the day the agreement was announced, said the accord should be put to a referendum, according to the results of the Kapa Research SA poll, published in To Vima newspaper. Forty-six percent said they’d oppose the plan at such a referendum. In the same poll, more than seven in 10 favored Greece remaining in the euro.