As a follow-up to my several postings on the situation in Greece, continued defections from Prime Minister George Papandreou's insistence that there be a referendum (when the EU had already agreed on a process of bailing out the country) could very well cause his government to fall if a confidence vote is called.
Even Finance Minister Evangelos Venizelos broke ranks with Papandreou, coming out against holding the referendum after a bruising meeting with the German and French leaders, who made clear that Greece would not receive NO financial aid until it votes to meet its commitments to the euro zone.
COMMENT: What is particularly crucial is that if the Papandreou's government does fall and elections were called, the referendum would be canceled. Yet, the bailout would have to be approved by the next parliament that emerges from elections, which could cause the country to collapse fiscally as Greece will run out of money by mid-November.
Venizelos, one of the most powerful figures in Papandreou's PASOK government, originally supported Papandreou's plan, but he quickly changed is mind after the the PM refused to back off of the referendum during an emergency summit in Cannes on Wednesday (November 2) with German Chancellor Angela Merkel and French President Nicolas Sarkozy.
Apart from Greece's immediate trouble, the country's default could well cause global stocks to crash significantly.
Apart from Greece's immediate trouble, the country's default could well cause global stocks to crash significantly.
