Greek prime minister announces referendum on bailout package

SPECIAL GUEST REPORT!

by Rick Murphy

Personal debt problems can be cured by debt settlement for the people of US. However, the Prime Minister of Greece, George Papandreou definitely isn’t getting any easy way out. In a recent economic decision, Papandreou has decided to hold a referendum on the EU bailout deal which although is a controversial plan but has won unanimous support from cabinet. He had announced in a late night cabinet meeting that the referendum is meant to be a clear mandate both inside and outside Greece on the course that Greece is going to take in its participation in the euro. He also announced that no one will be able to doubt the course that Greece takes within the euro and the market turmoil resulting due to his announcement of the referendum will be short lived. The cabinet had voted on that the referendum will take place as soon as possible.

Many stocks, both euro and global saw a downturn on financial markets following the announcement of Papandreou. His move brought into question the survival of crucial efforts in order to hold back the sovereign debt crisis of the euro zone. Asian stocks extended the wave of selling on 2nd November following the announcement. The leaders of the leading European nations, France and Germany were caught unawares by the gamble which has quite a lot of things at stake. They summoned the Greek prime minister to talk over the crisis in Cannes on Wednesday so that they can push in front of a summit of the G20 major world economies for implementing the bailout deal quickly.

However, Papandreou was of a different view. He said that the partners of Greece would support its policies and urged the G20 meeting to agree on policies that ensured the upper hand of democracy over market appetites. The German prime minister was quoted saying to the Financial Times Deutschland newspaper that he was confident that the Greeks would support the government’s reforms in the referendum. According to him, if Greece accepts the burden and efforts that are required by the aid programs and if it wants to stay within the euro zone, then Germany will support it.

The immediate hurdle that Papandreou needs to cross is a confidence vote. He told the cabinet that it was his belief that he would win both the vote and hold the referendum as planned. Of the ruling PASOK socialists of Greece, 6 seniors were angered by the decision of Papandreou’s decision to cal a plebiscite on the 130 billion euro rescue package that was agreed on the previous week and said that he should make way for a “politically legitimate” administration. Following Papandreou’s latest remarks made the euro fall by almost half a UD cent which showed that he had failed to do away with market worries about the debt crisis of the region.

Rick Murphy is a contributory writer associated with the Debt Consolidation Care Community and has written several articles for various financial websites. To get Debt related help visit: Photo credit – Harbermonitor.com

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