Stock Markets Really Hope There's No Greek Referendum

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After a big drop this morning, U.S. stock markets rebounded a bit on reports that Greek Prime Minister George Papandreou probably won't get his referendum after all. Both U.S. and European markets dropped way down when the Greek prime minister shocked everyone by saying he'd put the previously agreed-on Greek austerity plan up for a nation-wide referendum. That would delay or destroy the October agreement that seemed to save Europe from an imminent debt crisis. But many news reports this afternoon focused on just how bizarre Papendreou's actions were. Then the Dow Jones Newswires quoted an official from Papandreou's own Socialist party, who said the referendum was "basically dead," which helped U.S. markets slightly before the Dow finished down 2.48 percent overall. Now the Wall Street Journal reports that Papendreou's party is in "open revolt": 

Embattled Greek Prime Minister George Papandreou has called an emergency cabinet meeting later Tuesday amid an open revolt in his Socialist party that could topple his government.

"Papandreou is trying to control a growing revolt in the party after the defections and calls for him to resign. The future of the government may be decided at the cabinet meeting," a senior party official told Dow Jones Newswires.

Still as New York Times assistant managing editor Jim Roberts says, "Papandreou's decision to call referendum on Greece debt package is such a big deal."  because, as his paper reports, ousting the government doesn't neccessarily save the fragile debt plan. The Times's Niki Kitsantonis and Rachel Donadio report:

[It] would not only render the referendum plan moot but could also scuttle — or at least delay — the debt deal that European leaders agreed on after marathon negotiations in Brussels last week. That, in turn, could put Greece on a fast track to default and raises the prospect of the country’s exit from the monetary union of countries sharing the euro currency.

It looks like the observers who said we probably weren't done with the European debt crisis were proven right sooner than they thought. 

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