Greek cabinet backs European bailout referendum plan - CTV News

Market watchers will be braced for more turmoil Wednesday, after the cabinet of Greek Prime Minister George Papandreou gave its unanimous support to call for a referendum on the European plan to bail out the country's debt-ridden economy.

A spokesperson for the Greek government said cabinet ministers had agreed in a marathon meeting to hold the referendum "as soon as possible," after the details of the debt deal have been hammered out.
Earlier, Papandreou's call for a nationwide plebiscite on the debt deal and Greece's role in the European Union rattled global stock markets.

For more: CTV Edmonton - Greek cabinet backs European bailout referendum plan - CTV News

Greek referendum is very clever poker game of Papandreou

Financial analysts are saying the Greek prime minister George Papandreou risks a new euro zone crisis with his shock announcement that he will put the bailout deal struck last week to try to contain the EU's debt mountain to a referendum of voters already angry at harsh cuts. Euro zone leaders agreed to hand Athens a second, €130-billion-euro bailout and a 50-per cent write-down on its enormous debt to make it sustainable.

Mr Papandreou, whose ruling Socialist party has suffered several defections as it pushes waves of austerity measures through parliament while protesters rally outside, said he needed wider political backing for the fiscal measures and structural reforms demanded by international lenders.

Regardless of the fact that financial analysts are saying that holding a referendum - likely to be early next year and only Greece's second in almost 40 years - is bad for the markets, it will be a very direct way of confronting the Greek people with some realities of the actual economic situation in their country.

Voting no in the referendum would mean for Greece it will  need to get out of the EU and face more economic hardship. Gone will be all the perks provided by EU membership. Also going back to the old currency, the Drachma, would be a disaster as it would have very little value and nearly impossibility for Greece to obtain any loans. 

The referendum is a courageous and democratic gamble by Papandreou.  As to the Wall Street Casino manipulators and financial profiteers crying crocodile tears now it will just be a question of "getting with the program" or face bankruptcy. 
 
EU-Digest

Greek PM George Papandreou to form new unity government

Greek PM George Papandreou is to form a new government as he tries to win support for austerity measures demanded by the EU and IMF. He will seek to have the government ratified in a vote of confidence in parliament on Thursday, he said. 

Mr Papandreou has faced the threat of a revolt in his socialist Pasok party over the controversial package. Greek police clashed with anti-austerity protesters near parliament, and unions held a general strike.

"I will continue on the same course," said Mr Papandreou in a TV address on Wednesday evening. "This is the road of duty, together with Pasok's parliamentary group, its members, and the Greek people."

For more: BBC News - Greek PM George Papandreou to form new government