Markets Tumble as Greece Sets Referendum on Latest Europe Aid Deal

"In a surprise move that jolted Europe and put his political future in play, Prime Minister George A. Papandreou announced late Monday that his government would hold a referendum on a new aid package for Greece, putting austerity measures — and potentially membership in the euro zone — to a popular vote for the first time. The announcement sent tremors through Europe’s markets on Tuesday, with bank stocks taking a particular hammering. French and German indexes were down by more than 3 percent while, in Britain, which is not a member of the euro zone but trades heavily with continental Europe — the FTSE 100 index was down by 2.5 percent. Mr. Papandreou’s surprise promise of a vote on the austerity package introduced a note of uncertainty in what had seemed to be a done deal, threatening a comprehensive agreement reached by European leaders last week to shore up the euro zone. A rejection by the voters would also be likely to be treated as a vote of no confidence in the government and lead to early elections."
  via NYTimes.com /more