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| Version 6 | Version 7 |
|---|---|
| Eurozone debt crisis: Markets dive on Greek referendum | Eurozone 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. | 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 50% debt write-off for Greece last week as well as strengthening Europe's bailout fund. | Eurozone leaders agreed a 50% debt write-off for Greece last week as well as strengthening Europe's bailout fund. |
| 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 was down 3.0%, while the Dax in Frankfurt fell 5.2% and the Cac 40 in Paris dropped 4.5%. | |
| Shares in banks saw the biggest falls, with Credit Agricole down 11.5%, Societe Generale falling 14.4%, BNP Paribas down 10.5% and Barclays 9.3% lower. | Shares in banks saw the biggest falls, with Credit Agricole down 11.5%, Societe Generale falling 14.4%, BNP Paribas down 10.5% and Barclays 9.3% lower. |
| German Chancellor Angela Merkel is due to discuss the Greek announcement with French President Nicolas Sarkozy on the telephone. | German Chancellor Angela Merkel is due to discuss the Greek announcement with French President Nicolas Sarkozy on the telephone. |
| Italian Prime Minister Silvio Berlusconi said it was "an unexpected decision that generates uncertainties". | Italian Prime Minister Silvio Berlusconi said it was "an unexpected decision that generates uncertainties". |
| Confidence vote | Confidence vote |
| Greek opposition parties have accused Prime Minister George Papandreou of acting dangerously, and called for an early election. | Greek opposition parties have accused Prime Minister George Papandreou of acting dangerously, and called for an early election. |
| "Elections are a national necessity," conservative leader Antonis Samaras said, adding that Mr Papandreou was putting Greece's EU membership at risk. | "Elections are a national necessity," conservative leader Antonis Samaras said, adding that Mr Papandreou was putting Greece's EU membership at risk. |
| January seems to be the best bet for when a referendum will take place. | January seems to be the best bet for when a referendum will take place. |
| If a week is a long time in politics, two months is an eternity in financial markets in their current state of mind. | If a week is a long time in politics, two months is an eternity in financial markets in their current state of mind. |
| A "no" would blow away one leg of the euro rescue package agreed in Brussels last week, and it was a precarious, unfinished structure in the first place. | |
| Some even see the vote as a referendum on Greek membership of the eurozone. | Some even see the vote as a referendum on Greek membership of the eurozone. |
| Perhaps Mr Papandreou is gambling that voters will see it that way and reluctantly say "yes". | |
| The markets may have good and bad days, but they won't quietly bide their time while they wait to see if the bet pays off. | The markets may have good and bad days, but they won't quietly bide their time while they wait to see if the bet pays off. |
| A confidence vote is due to take place in the Greek parliament on Friday. | A confidence vote is due to take place in the Greek parliament on Friday. |
| Mr Papandreou has 153 deputies in the 300-seat parliament, but has faced increasing dissent within his own party. | |
| One of his MPs, Milena Apostolaki, resigned from the parliamentary group on Tuesday and six members of the party have called for Mr Papandreou to resign, according to the state news agency. | |
| Opinion polls in Greece suggest that most people do not support the deal and there have been demonstrations against the austerity measures across the country, some of them violent. | |
| Mr Papandreou told a meeting of his governing Socialist party on Monday that Greek people would have the final say on the austerity 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 on Monday that Greek people would have the final say on the austerity 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. |
| The austerity measures are a condition of the bailout packages from the European Union and International Monetary Fund. | The austerity measures are a condition of the bailout packages from the European Union and International Monetary Fund. |
| Some analysts are saying that the referendum would in effect be on whether Greece should abandon the euro. | Some analysts are saying that the referendum would in effect be on whether Greece should abandon the euro. |
| Nobel Prize winning economist Christopher Pissarides said, "If there is a 'no' vote, Greece would immediately declare bankruptcy. I do not see how Greece could remain in the euro." | Nobel Prize winning economist Christopher Pissarides said, "If there is a 'no' vote, Greece would immediately declare bankruptcy. I do not see how Greece could remain in the euro." |
| There is also concern that the referendum would be unlikely to take place before January, which would create months of uncertainty for the markets. | There is also 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. | "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." | "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. | 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. | "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." | "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. | 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. |
| On the currency markets, the euro fell 1% against the US dollar. | On the currency markets, the euro fell 1% against the US dollar. |
| The yield on German bonds fell to near record lows, while the difference between the yield of German bonds and those of Italian and Belgian bonds rose to the highest since the introduction of the euro. | The yield on German bonds fell to near record lows, while the difference between the yield of German bonds and those of Italian and Belgian bonds rose to the highest since the introduction of the euro. |
| 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 referendum announcement as well, with the FTSE, Dax and Cac 40 all dropping by about 3% on Monday. | Europe's main share markets had all fallen before the referendum announcement as well, with the FTSE, Dax and Cac 40 all dropping by about 3% on Monday. |