The Greek government teetered and stock markets around the world plummeted Tuesday after months of negotiations to save the Greek economy were suddenly thrown into disarray by the prospect of a public vote.
One day after Prime Minister George Papandreou stunned Europe by calling for a referendum vote on the EU bailout, the ripples reached from Athens, where some of his own lawmakers rebelled against him, to Wall Street, where the Dow Jones industrial average plunged almost 300 points.
Papandreou convened his ministers Tuesday night, and a spokesman said the prime minister was sticking to his decision to hold the referendum. Papandreou has also called a vote of confidence in his government, to be held midnight Friday.
“The referendum will be a clear mandate and a clear message in and outside Greece on our European course and participation in the euro,” Papandreou said, according to a statement released by his office. “No one will be able to doubt Greece’s course within the euro,” the statement said according to CNBC.
It is unclear whether Papandreou will have enough support. Several Socialist lawmakers have openly rebelled, with one going as far as defecting. Milena Apostolaki‘s departure whittled Papandreou’s parliamentary majority to just two deputies, leaving the party with 152 seats in the 300-member legislature.
Apostolaki’s departure “shows clearly that the government itself is losing gradually its cohesion,” said George Tzogopoulos, a political analyst from the Hellenic Foundation for European and Foreign Policy.
He estimated that “that the government will not be able to remain in power for many days” and said it was likely that Papandreou “will call an early election very soon.”
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