CNBC Video - Michelle Caruson Cabrera reports from Greece.
The country that invented drama and democracy is not disappointing
the world on either front. Greek Prime Minister George Papandreou on
Monday called for two high- stakes votes.
The first asks parliament to say by the end of this week whether it
has confidence in his leadership. The second is a referendum in which
Greek voters would approve or reject, possibly by year’s end, Europe’s
latest debt-crisis workout.
The move blindsided European leaders on the eve of a global summit
and rocked lawmakers in Papandreou’s party, some of whom are now calling
for him to step down. The next day, stocks tumbled worldwide, the euro
declined and Italian bonds plunged.
No doubt, Papandreou’s gambit is extremely risky. He has only a
three-seat parliamentary majority. And the referendum, if rejected,
could push Greece into default and out of the European Union and the
single currency. A doomsday scenario could follow, including financial
market mayhem, soaring sovereign borrowing costs and cascading bank
failures. Europe and the U.S. could fall back into recession.
Still, it was the right thing to do. Greek citizens deserve a say on
one of the most important matters in their lifetimes. Perhaps more
important, the move could finally force Europe into the full reckoning
required to solve its two-year-old sovereign- debt crisis.
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