Greece Threatens to Undo the EU Bailout by Putting It to a Vote

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Greek Prime Minister George A. Papandreou has upset European leaders (and their financial markets) by calling for a public referendeum on the negotiated bailout package that he had agreed to last week. The move throws the entire continent back into turmoil as one of the European Union's smallest members continues to wreak havoc on everyone else.

The bailout deal, which was pulled together in a marathon session of the Eurozone's top leaders, was designed to shore up Greece's massive debt problem and bring the country's financial house back into line. The key to the bailout, as usual, was forcing the country to agree to punishing austerity measures that Papandreou now realizes will not sit well with his people. A German parliamentary leader tells Reuters that, "This sounds to me like someone is trying to wriggle out of what was agreed -- a strange thing to do."

By putting it to a vote, Papandreou is basically putting his entire government and possibly Greece's EU membership on the line. If voters reject the deal, they're saying "thanks, but no thanks" to the very idea of sharing an economy with the rest of Europe. A no vote would likely lead to a Greek default and the end of the euro in that country, as well as the end of Papandreou's tenure and new elections.

A spokesman for the Greek opposition party called Papandreou "dangerous," adding, "He cannot govern and instead of withdrawing honorably, he dynamites everything."

As a result of the move, European stocks suffered their biggest one-day drop in six weeks.

This article is from the archive of our partner The Wire.