After calling for a referendum on the bailout package for his country arrived at just last week, Greek Prime Minister George Papandreou found fellow lawmakers calling for his resignation for putting the country in jeopardy of default.
Not just leaders of the eurozone, but markets were stunned by the refrendum call; Papandreou did not notify policymakers before the announcement. The decision sent the euro and bank stocks tumbling as investors and officials alike feared the vote could lead not just to a derailment of the bailout but an immediate default by Athens, tearing the common currency apart and perhaps having even broader repercussions.
The German DAX index tumbled by 5%, while the French CAC had slipped by 5.38%. In Britain, which is not a member of the eurozone, the FTSE 100 index was down by 3.44%. Markets in the U.S. slid sharply in afternoon trading, with the three main indexes down more than 2%.
Reuters reported that a member of Papandreou’s own party, Milena Apostolaki, quit over the action, narrowing an already scant majority in the ruling coalition, while six others called for him to step down to clear the way for “a politically legitimate” administration”; the opposition has called for snap elections. Irate French and German leaders summoned Papandreou to come to Cannes Wednesday for a crisis meeting, ahead of the G20 meeting scheduled to begin on Nov. 3.