Reply #39: EU Shocked and Furious at Greek Referendum Plan

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http://www.spiegel.de/international/europe/0,1518,795176,00.html

The shock announcement by Greek Prime Minister Giorgios Papandreou of a referendum on the Greek bailout has thrown efforts to rescue the single currency into doubt, unsettled global markets and angered EU leaders just days after they agreed a wide-ranging package to contain the debt crisis.

Global stock markets fell on the news. German and French stock indices were down more than 3 percent on Tuesday, with banking shares among the main losers. The UK FTSE index slid 2.5 percent. The euro was down over 1.3 percent from Monday at $1.3735 in late morning trading.

Shares in Commerzbank, Germany's second largest bank, slumped more than 10 percent and Deutsche Bank, the country's top bank, fell almost 8 percent. One economist at Bremer Landesbank said a Greek rejection of the euro zone's plan to provide Athens €130 billion ($178 billion) worth of aid and arrange a 50-percent write-down on its debt would be "suicide."

Papandreou, whose Socialist party has been hit by defections as it defied waves of at-times violent public protests and strikes to impose austerity measures demanded by international lenders, said he needed broader political support for the measures.