Greece faces meltdown after bailout vote bombshell

ATHENS, (Reuters) – The Greek government faced  possible collapse today as ruling party lawmakers demanded  Prime Minister George Papandreou resign for throwing the  nation’s euro membership into jeopardy with a shock call for a  referendum.
Caught unawares by his high-risk gamble, the leaders of  France and Germany summoned Papandreou to crisis talks in Cannes  tomorrow to push for a quick implementation of Greece’s new  bailout deal ahead of a summit of the G20 major world economies.
Six senior members of the ruling PASOK socialist party,  angered by his decision to call a plebiscite on the 130 billion  euro rescue package agreed only last week, said Papandreou  should make way for “a politically legitimate” administration.
A leading PASOK lawmaker quit the party, narrowing  Papandreou’s already slim parliamentary majority, and two others  said Greece needed a government of national unity followed by  snap elections, which the opposition also demanded.
Euro zone leaders thrashed out Greece’s second financial  rescue since last year, in return for yet more austerity, in the  hope that it would ease uncertainty surrounding the future of  the 17-nation single currency.
Instead, financial markets suffered another bout of turmoil  on Tuesday due to the new political uncertainty and the risk  that long suffering Greeks may reject the bailout.
The euro fell nearly three cents against the dollar  and the risk premium on Italian bonds over safe-haven German  Bunds hit a euro lifetime high, raising Rome’s borrowing costs  to levels that proved unsustainable for Ireland and Portugal.

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