Sarkozy to telephone Merkel on Greek referendum: Elysee

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French President Nicolas Sarkozy is to telephone German Chancellor Angela Merkel around midday on Tuesday after Greece announced it would hold a referendum on a debt rescue package, the Elysee palace said.

Greek Prime Minister George Papandreou's surprise announcement on Monday of a referendum on last week's EU debt deal in the hope of silencing widespread opposition to austerity measures sent stocks tumbling on Tuesday.

Analysts were unanimous in condemning the Greek decision saying that this "gamble" had "shocked" financial markets and raised risks for the future of the eurozone."

Many see the referendum as a vote on membership of the eurozone.

French banks which have taken a battering on the stock market over fears of their exposure to Greek debt headed the losses: Societe Generale was down 11.92 percent, Credit Agricole down 11.58 percent and BNP Paribas 10.05 percent.

Sarkozy is to host leaders from the G20 bloc of leading economies in the southern city of Cannes on Thursday and Friday.

© 2011 AFP

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