Greek Referendum Causes Market Turmoil

European markets have dived in response to a shock announcement by Greece that it would be holding a public referendum over its decision to accept the latest EU bailout package.

During late night discussions last week, Eurozone leaders agreed a 100bn-euro (£86bn; $140bn) loan to Athens and a 50% debt write-off of its debt.

World markets had responded favourably to the announcement, however, on Monday evening, the Greek Prime Minister George Papandreou said he would give the decision to the people.

Currently it is estimated that around 60% of the Greek population oppose accepting the deal, plunging the markets back into turmoil.

The FTSE 100 in London traded 2.5% lower, the Dax in Frankfurt fell 3.8% and the Cac-40 in Paris dropped 3.3%.

Meanwhile, a United Nations report issued today warned the cooling global economy risks pushing the world into a double-dip jobs recession, triggering an outbreak of social strife unless governments take urgent action to stimulate employment growth.

In what it calls a “grim analysis” of the future of global employment, the International Labour Organisation (ILO) said that while private enterprises are in an even weaker position to retain employees since the start of the financial crisis, austerity measures implemented by governments have contributed to the growing numbers of unemployed.

“We have reached the moment of truth,” said Raymond Torres, Director of the ILO’s International Institute for Labour Studies, which issued the report. “We have a brief window of opportunity to avoid a major double-dip in employment.”

The report also pointed out that at the current rate, it would take at least five years for employment in developed countries to return to pre-crisis levels – one year longer than projected in last year’s report.

(DW)