Greece to Vote on Euro Membership – EU break up?

November 2, 2011


Bloomberg just put up a headline which said


Which has been followed up just now by a story which says

Greek Prime Minister George Papandreou told his ministers in Athens today that his plans for a referendum would confirm Greece as a member of the European Union and the euro area and send a clear message.
“The dilemma isn’t ‘this or another government’,” Papandreou told his ministers in Athens today, according to an e-mailed transcript of his statements. “The dilemma is ‘yes or no to the loan accord’, ‘yes or no to Europe’, ‘yes or no to the euro’.”
 Papandreou said resorting to early elections would be “shirking responsibility”.

The Australian dollar, EUR and other risk assets have been pollaxed in Asian trade post announcement. I have no idea what this means longer term or if indeed Papendreou knows his people better than the outsiders who see this as a dangerous path. As the article suggests above he thinks he is going to get this sorted in the referendum once and for all but the risk is he fails and Greece spirals out of control taking Italy and the Euro with it.

Indeed the BBC reports that,

The prime minister has told his cabinet that any market turmoil will be short-lived, according to Reuters. He also said the G20 should focus on safeguarding democracy, rather than the financial markets,

That is a really interesting take given that the top military brass were replaced overnight. Here is an article from the Athens News (HT Credit Writedowns) which covers the story. What is going on, a coup?

We had thought we would be able to put Greece aside for a few months at least but that unfortunately is not the case. It is a dangerous time for risk assets and safety on the sidelines is probably warranted.

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