Greek referendum 'anything but helpful': German banks

1st November 2011, Comments 0 comments

Greece's decision to put the EU's hard-fought bailout deal to a vote has led to "considerable uncertainty" and is "anything but helpful," the head of Germany's banking association said on Tuesday.

"The uncertainty that will probably last for weeks as a result is anything but helpful in terms of stabilising an already difficult situation," said Michael Kemmer, head of the BdB banking association.

The referendum call has led to "considerable uncertainty" on the markets, Kemmer added, as European stock markets plunged in response to the news.

"Important details following the euro summit will now be delayed or, in the worst case scenario, put on ice," added Kemmer, whose association represents major German banks.

"In addition, it is totally unclear what would happen if the Greek people reject the rescue package," he said.

In a shock move late on Monday, Greek Prime Minister George Papandreou plunged the euro back into crisis with the announcement he would put the rescue deal to a referendum.

Markets and the euro dropped sharply as traders feared the rescue efforts could begin to rapidly unravel.

A former economy minister, Rainer Bruederle, told German radio he found the decision "strange" adding that the EU needed to take precautions against a Greek default.

The Greek people must decide whether to remain in the euro or not, added the former minister, parliamentary leader of Chancellor Angela Merkel's junior coalition partner, the Free Democrats.

© 2011 AFP

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