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Ambrose Evans-Pritchard: Why the Greek decision means a complete unravelling of last week's deal

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George Papandreou has announced that there will be a Greek referendum to approve the EU bail-out deal

George Papandreou has announced that there will be a Greek referendum to approve the EU bail-out deal

George Papandreou has announced that there will be a Greek referendum to approve the EU bail-out deal

GREECE'S astonishing decision to call a referendum – "a supreme act of democracy and of patriotism", in the words of premier George Papandreou – has more or less killed last week’s EU summit deal.

The markets cannot wait three months to find out the result, and nor is China going to lend much money to the EFSF bail-out fund until this is cleared up. The whole edifice is already at risk of crumbling. Société Générale is down 15pc this morning. The FTSE MIB index in Milan has crashed 7pc. Italian bond spreads have jumped to 450 basis points.




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