Wall Street Journal
November 1, 2011
Greek Prime Minister George Papandreou stunned Europe by announcing a referendum on his country's latest bailout—a high-stakes gamble that could undermine the international effort to preserve the euro.
A "yes" vote in the referendum could deflate the massive street protests and strikes that threaten to paralyze Greece as it tries to enact a brutal austerity program to earn rescue loans from the euro zone and the International Monetary Fund.
A "no" vote, however, could bring down the government and cut off international funding for Greece, leaving the country facing a financial meltdown. The government expects to hold the referendum in January.
Some Greek government officials believe a defeat in the referendum could propel their country out of the euro zone. Many European policy makers fear that a messy Greek default could spark a financial-market panic that would particularly affect Italy, a major European economy that's already struggling to retain investors' trust.
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