Markets tumble as Greek Cabinet votes to hold ‘debt referendum’

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Markets across the world have taken a dive after the Greek Cabinet’s shock announcement that it intends to hold a referendum into the EU debt rescue package.

Greek PM George Papandreou claimed that the referendum was needed in order to establish a “clear mandate” for austerity measures that would inevitably have to be introduced.

Stock markets fell sharply at the surprise announcement.

In a press statement Mr Papandreou said: “The referendum will be a clear mandate and a clear message in and outside Greece on our European course and participation in the euro.”

Mr Papandreou is due to meet leaders from other European leaders in France today.  There are concerns that the decision may threaten the future of the Eurozone should the Greek electorate refuse to endorse the measures.