Greece Moving Away From EU, Collapsing Consciously

Athens, Greece (CNN) -- Stock markets in the United States and Europe dropped dramatically Tuesday after Greek Prime Minister George Papandreou stunned the world by calling a national referendum on international aid for his country.

A "No" vote could theoretically force Greece to crash out of the euro and send shock waves through the global financial system.

Papandreou is seeking public backing for the bail-out deal, which took months to hammer out.

But French President Nicolas Sarkozy and German Chancellor Angela Merkel issued a terse statement Tuesday saying they were "determined to ensure the full implementation, without delay, of decisions adopted by the summit, which are necessary now more than ever."

The agreement would see the country's sky-high debts cut in half, but it comes with strings attached which have led to angry demonstrations in the streets of Greece.

International lenders are demanding that Athens raise taxes, sell off state-owned companies, and slash government spending -- which means firing tens of thousands of state workers.

German and French markets were down about 5% in afternoon trading Tuesday, and the Dow Jones index plunged more than 250 points at the opening before recovering slightly, then falling further.

It seems to be getting harder and harder to prop up this false wealth global economy, and the people at the bottom keeping it afloat are less likely to continue to support it.

The announcement of the referendum rattled Papandreou's hold on power Tuesday, as a lawmaker defected from his party, leaving him with a majority of only two in Parliament.

The European debt crisis claimed its first American victim shortly before Papandreou announced the referendum on Monday, as MF Global filed for bankruptcy protection, leaving top Wall Street creditors holding more than $2 billion in debt.

The root of the problem is that taxpayers around the world are being manipulated to support the big banks through false bailouts that do not support the actual nations, but those financial companies that knowingly buy insolvent debt, expecting to receive bailouts when those markets and investments fail.

The commodities and derivatives broker was run by ex-Sen. Jon Corzine, a former head of Goldman Sachs.



"The prime minister will be hoping for a vote in favor to strengthen his mandate, but if the Greek population votes against, it will leave the IMF and Greece's European partners in a very difficult situation," said Gary Jenkins of Evolution Securities.

The planned referendum casts a shadow on a hard-fought deal that would allow Greece to write off much as 50% of its debts to banks.

The agreement for private lenders to scrap half of Greece's debt is worth 100 billion euros to Athens, and comes along with a promise of 30 billion euros from the public sector to help pay off some of the remaining debts, making the whole deal worth 130 billion euros ($178 billion).

A weekend survey in Greece found nearly 60% opposed the debt deal reached in Brussels last week.

"If approved, a vote of confidence in government's handling of the situation ... if calmer heads prevail and it can rationally be explained to the public, I wouldn't discount the measure being approved.

Greek surprise sends shock waves through markets

The euro weakened for a third day against the dollar, touching the lowest in almost three weeks, as concern the currency region’s rescue plan will crumble and the European Central Bank will cut interest rates damped demand.

The 17-nation currency fell the most in two weeks versus the yen after Greek Prime Minister George Papandreou pledged to put the European Union’s latest accord to a referendum, risking pushing the country into default if rejected by voters. The dollar and yen strengthened as stocks slid around the world and data showed Chinese manufacturing slowed. Australia’s dollar dropped after the nation’s central bank lowered interest rates.

Euro Declines Amid Renewed Greek Default Concerns; Dollar, Yen Strengthen