Post date: Nov 01, 2011 8:16:29 PM
Stocks fell sharply on Wall Street and across Europe as political maneuverings in Greece threw a European debt deal into disarray.
EUROPE/US-GREECE REAX UPDATE - A global sell-off in equities extends to a second day, pushing the S&P 500 and the Nasdaq back into negative territory for the year, as markets take their cue from European politics.
Investors now have concrete reason to worry.
Greek Prime Minister George Papandreou called a referendum, calling on everyday Greek citizens to vote on an international bailout deal for the indebted nation.
Greek ruling party deputy Melina Apostolaki, seen here at her swearing-in in 2010, quit in protest.
The political uncertainty throws the process of cleaning up Europe's debt crisis into disarray.
And according to Joerg Rocholl, President of European School of Management and Technology in Germany, Papandreou's decision once again puts the "union" in European Union at risk.
JOERG ROCHOLL, PRESIDENT, EUROPEAN SCHOOL OF MANAGEMENT AND TECHNOLOGY (SAYING:
"The announcement is very surprising and also courageous because there is a large risk that the whole thing will go wrong. If it goes well he of course has the support of the Greek people. If not, it could lead to a situation where Greece can no longer remain a member of the euro zone".
And that uncertainty has reopened raw nerves on trading floors across Europe.
In Germany, stocks were down almost 5 percent.
Trader, Oliver Roth:
OLIVER ROTH, TRADER, CLOSE BROTHERS SEYDLER BANK SAYING:
"The worst case scenario is right now that if Greece is really rejecting the rescue package, the European rescue package that it might blow up the whole euro system."
And it wasn't much better in France, where traders looked to a surprised President Nicolas Sarkozy for further word.
Sarkozy and Germany's Angela Merkel, the two leaders who took the lead in Greek debt negotiations, will meet with Greek officials on Wednesday, according to his office - as the two once again try to convince jittery global investors that Europe is still a safe place to invest.
Conway Gittens, Reuters