World markets held hostage to Greek chaos
The whole world cheered last week when European leaders hammered out a hard fought deal to save Greece from its debts, but tonight that deal may collapse along with the Greek government itself.
CBS News correspondent Mark Phillips reports that Greek Prime Minister George Papandreau has stunned the financial world by announcing that the painstakingly negotiated bailout deal with European leaders to try to save his country from bankruptcy would now be put to a national referendum.
Months of violent demonstrations have already shown how divided Greece is and putting the package -- which calls for tax hikes along with salary and pension cuts -- to a public vote is seen as an invitation for the deal to unravel, dragging any hope of world economic recovery down with it.
"Just when we thought the European debt crisis had finally been put to bed, it's injected again the massive volatility and uncertainty back into financial markets," said David Jones with the IG index.
Debt deal referendum throws Greece in chaos
Markets rattled by Greece referendum
Greece hurls a curveball at EU debt deal
Papandreau's government will face a confidence vote on Friday and could fall. That would put the bailout deal in jeopardy and put Greece on the fast track to default. Papandreau is also expected to be asked some hard questions by the other world leaders who are due to gather at an economic summit in Europe this week and who have stuck their financial necks out for him.
This was supposed to be the week world leaders gathered here in France to plan the next stage of the economic battle -- and for the demonstrators to tell them what they're doing wrong. Instead, the agenda has been tossed into the air like a Greek salad.
Instead of dealing with big plans to fix a stuttering world economy, the argument here will sidetracked by a small country, Greece, that is causing big countries so much trouble.
