Greece’s Prime Minister George Papandreou has called for a referendum on the newest EU bailout/austerity program forced on the country. This has caused a rebellion in his own party.
The austerity measures that were imposed with the past EU deals have been deeply unpopular with the Greek people, and polls show voters disapprove of this new deal. As a result world markets are panicking based on the assumption the Greeks will vote against the deal. The Euro value has fallen (usually a good thing for them to help their exports) and all over the world stock markets are down sharply.
No one knows if the referendum will even happen, whether it will fail or what will happen if it does. It could potentially have huge implications for the economy of Europe. Paul Krugman thinks this referendum could be part of the beginning of the end of the Euro currency union as it’s currently structured. The reaction of world markets shows he is not the only one to think that way.
http://elections.firedoglake.com/2011/11/01/the-referendum-that-could-indirectly-bring-down-obama/
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