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Market jitters expected after sudden call for Greek bailout vote

Prime Minister George Papandreou’s move has been compared to blackmail by the opposition after he called on Greek people to vote on their latest bailout agreement.

Anti-austerity protesters clash with riot police in Iraklio, Crete, on Friday.
Anti-austerity protesters clash with riot police in Iraklio, Crete, on Friday.
Image: AP/PA Images

FURTHER STOCK MARKETS jitters are expected in reaction to news from Greece last night that the government wants to hold a referendum on its latest EU-IMF bailout agreement.

Prime Minister George Papandreou, who has a very narrow majority in parliament, said yesterday that the referendum is “a supreme act of democracy and of patriotism” for Greek people.

However, the opposition has compared Papandreou’s announcement to blackmail against Greek citizens, Ekathimerini reports.

The bailout is known to be highly unpopular in Greece, where several waves of anti-austerity protests have resulted in mass strikes.

Greek leader George Papandreou is also highly unpopular at the moment, casting doubt on his ability to successfully support such a referendum.

Papandreou’s sudden referendum call came just days after his fellow EU leaders agreed a major new bailout deal for the country which sees it get a 50 per cent debt writedown by its private sector creditors. It is not clear when the referendum will be held and at least 40 per cent of the electorate must cast a vote in order for the referendum result to hold.

The Greek ministry of finance recently released figures showing that the country’s budget deficit hit €19.16 billion by the end of September 2011, according to Athens News.

French President Nicolas Sarkozy recently criticised Greece’s entry to the eurozone, saying that the country should not have been permitted to join the single currency at that time given its financial and economic position.

Read: Greece to hold referendum on new debt deal >

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