Has Greek Prime Minister George Papandreou lost his mind, with a shocking decision to call a referendum on Greece's bailout offer from European nations hoping to avert a global financial meltdown spurred by Greece default?
That's the question global financial leaders are asking after the stunning move by Papandreou, which has the ability to shove Greece into default regardless of how the referendum might play out since European leaders are angered and considering casting Greece adrift to face its ultimate demise.
Papandreou is clearly responding to a poll conducted on the day the Eurozone agreement to bailout Greece was announced when a majority of Greece residents said the accord should be put to referendum -- and some 46 percent said they would oppose such a plan.
That's why global markets clearly over-reacted last week when the accord was announced, acting as if they thought the looming financial disaster starting with Greece default and continuing to Italy and Spain before rippling across the globe had been solved. If one had bought into the reactions of global financial markets, which soared on the news, they could have slept well at night.
But now we know the rest of the story, and it's still unfolding. Greece is quite sick economically, but that doesn't mean the people of that country want the medicine being prescribed by the Eurozone. Now we know everything is not okay -- though one hates to be the naysayer of something so large as this potential global economic bomb.
It's just that reality tells a different story, one much different from market reactions and hopes pinned upon the deal reached among European leaders to keep Greece, the first shoe, from falling so that Italy doesn't tumble next setting off a dangerous ripple impact that would send the world into a major financial crisis.
But oh, the best laid plans. The complexity of the countries, leaders, and citizens involved in this Eurozone crisis are such that reaching a final solving solution will prove difficult. It's unclear what the response of Greek leaders and citizens will be in regard to the stunning Papandreou plan, but one thing that's clear already: It's messed up what appeared to be strong accord and global markets hope last week.
In response, global markets that surged on the plan last week were hammered on Tuesday. Germany, the key to Greece's bailout salvation, was furious.
One can only do one thing: make the preparations for the eventuality that there is a state insolvency in Greece and if it doesn't fulfil the agreements, then the point will have been reached where the money is turned off, said Rainer Bruederle, a parliamentary floor leader for the Free Democrats and a former German economy minister, according to Reuters.
If Greece votes no on the measure proposed by Papandreou then it will mean political crisis, said Spanish Secretary of State for the European Union Diego Lopez Garrido. But already the damage has been done, even before the vote, as Papandreou's call for a referendum and a parliamentary confidence vote has caused chaos among leaders in a region that needs calm and reason.
But achieving accord in the Eurozone, made up a diverse nations, leaders and citizens, may not be as easy in the end as the markets had hoped for last week. It's just not that simple.