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| Greece debt crisis: Markets dive on Greek referendum | Greece debt crisis: Markets dive on Greek referendum |
| (40 minutes later) | |
| European markets have fallen following Monday's announcement of a Greek referendum on the latest aid package to solve its debt crisis. | |
| Eurozone leaders agreed a 100bn-euro (£86bn; $140bn) loan to Athens and a 50% debt write-off last week. | Eurozone leaders agreed a 100bn-euro (£86bn; $140bn) loan to Athens and a 50% debt write-off last week. |
| But the announcement of a referendum has cast doubt on whether the deal will be able to go ahead. | But the announcement of a referendum has cast doubt on whether the deal will be able to go ahead. |
| The FTSE 100 in London traded 2.5% lower, the Dax in Frankfurt fell 3.8% and the Cac-40 in Paris dropped 3.3%. | |
| Earlier, the Nikkei in Tokyo closed down 1.7% and the Hang Seng in Hong Kong closed down 2.5%. | Earlier, the Nikkei in Tokyo closed down 1.7% and the Hang Seng in Hong Kong closed down 2.5%. |
| Europe's main share markets had all fallen before the Greek announcement as well, with the FTSE, Dax and Cac-40 all dropping about 3% on Monday. | Europe's main share markets had all fallen before the Greek announcement as well, with the FTSE, Dax and Cac-40 all dropping about 3% on Monday. |
| Opinion polls in Greece suggest that most people do not support the austerity deal. | Opinion polls in Greece suggest that most people do not support the austerity deal. |
| Mr Papandreou told a meeting of his governing Socialist party that Greek people would have the final say on the package, which is designed to reduce Greek debt by about 100bn euros through a series of measures including public sector pay cuts, tax rises and falling pensions. | Mr Papandreou told a meeting of his governing Socialist party that Greek people would have the final say on the package, which is designed to reduce Greek debt by about 100bn euros through a series of measures including public sector pay cuts, tax rises and falling pensions. |
| There is concern that the referendum would be unlikely to take place before January, which would create months of uncertainty for the markets. | There is concern that the referendum would be unlikely to take place before January, which would create months of uncertainty for the markets. |
| "We cannot wait until 15 January," said Konstantinos Michalos, president of the Athens Chamber of Commerce. | |
| "Personally I do not think we will ever get there." | |
| A senior member of Chancellor Angela Merkel's coalition in Germany said he had been irritated by the referendum announcement. | |
| "The prime minister had [agreed] to a rescue package that benefited his country," Rainer Bruederle told Deutschlandfunk radio. | |
| "Other countries are making considerable sacrifices for decades of mismanagement and poor leadership in Greece." | |
| He added that the only thing to do now would be to prepare for the Greek state to be insolvent and try to limit the damage to Europe's banking system. |