Greek PM promises referendum on bailout, putting EU on edge; Global markets drop sharply on news; MPs walk out on Greek government, new election likely (+ analysis); Libya's NTC chooses engineer as new PM; Taliban claims it set Kandahar bomb that killed seven; US slams UNESCO on Palestine vote; China launches spacecraft; and more

Top of the Agenda: Greek Referendum Complicates Euro Rescue

Greek Prime Minister George A. Papandreou announced that he will seek a referendum on a new EU rescue package for Greece, potentially jeopardizing a fragile agreement (NYT) that includes substantial contributions from fellow eurozone states and private creditors.

Papandreou's surprise decision comes less than a week after European leaders agreed on a comprehensive plan (WSJ) to tackle the widening eurozone sovereign debt crisis. The package included a €130 billion bailout for Greece that will see private creditors take a haircut of 50 percent; recapitalization of the continent's exposed banks; and an expansion of the temporary eurozone bailout mechanism.

A majority of Greeks remain opposed to further EU bailouts (DeutscheWelle), making a "yes" vote on the referendum far from certain. Greek citizens have been protesting for weeks over harsh EU- and IMF-mandated austerity measures, which are a prerequisite for the deal.

Global markets dropped on the news, and analysts predicted weeks of market volatility (DerSpiegel) ahead of Papandreou's proposed January vote.

Analysis

Greece's decision to stage a referendum on the latest rescue package is a desperate gamble, which could go horribly wrong and impoverish not just Greeks but everyone, writes the Guardian's Michael White.

EU leaders agreed last week to significant moves to address the eurozone sovereign debt crisis that has roiled global markets. But analysts and investors are skeptical of the plan's long-term prospects, explains this CFR Analysis Brief.

The eurozone, once seen as a crowning achievement in the decades-long path of European integration, is buffeted by a sovereign debt crisis of nations whose membership in the currency union has been poorly policed, explains this CFR Backgrounder.

 

PACIFIC RIM

China Launches Unmanned Spacecraft

China launched an unmanned spacecraft from the Gobi desert that is expected to dock with an orbiting module (Guardian) within two days. The mission is a significant step forward in China's efforts to build a manned space station.

SOUTH KOREA: President Lee Myung-bak travelled to St. Petersburg today for talks with Russian President Dmitry Medvedev, which will focus on a plan to link the countries with a gas pipeline (Yonhap) through North Korea.

 

ELSEWHERE:

Libya names new Prime Minister

Taliban claims responsibility for Afghanistan bombing

US cuts UNESCO funding after Palestine vote

This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org.

Comments (5)

by Ian MacKay on November 02, 2011
Ian MacKay

Iceland hed such a referendum didn't they, and defaulted and survived. Didn't one of the South American countries also default, then nationalise and survive?

by Ian MacKay on November 02, 2011
Ian MacKay

Greece. The next "payment" is due in December. The Referendum would be held in January. Figure that?

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