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What Is Happening In Greece?

Paresh Dave |
November 1, 2011 | 3:29 p.m. PDT

Editor-In-Chief

Greek Prime Minister George Papandreou single-handedly through a wrench into global financial markets on Tuesday, saying Greek lawmakers should ask voters to approve the country's second bailout in as many years by fellow European nations. (Creative Commons)
Greek Prime Minister George Papandreou single-handedly through a wrench into global financial markets on Tuesday, saying Greek lawmakers should ask voters to approve the country's second bailout in as many years by fellow European nations. (Creative Commons)

Greece's government spent way more money than it in brought during the past several years, leaving it with billions of dollars in debt.

Other countries in Europe agreed to loan billions of dollars to Greece last year. But that wasn't enough. Last week, they agreed to a second bailout. Greek prime minister George Papandreou agreed to the deal.

But suddenly late Monday, he said he wanted to citizens to approve the plan at the ballot box (likely in Janaury).

Such a vote might make him more popular with voters and save his job, but Greeks have been protesting against the cutbacks they will be forced to make to help pay off the bailout from European partners. A vote might mean the agreement would collapse.

Lawmakers, however, were not happy with the vote proposal, which came without warning. One lawmaker switched parties Tuesday and thus weakened Papandreou's grip on government. Others called for him to resign.

And the rest of the European Union was sent scrambling. France and Germany called for an emergency meeting with Greece on Wednesday.

Stock markets across the globe went downhill.

So if the loan to Greece doesn't go through, Greece might be forced to leave the European Union.

As Greece stops paying off its debt, that could affecting European banks and then American banks.

Such a ripple could further worsen the state of the American economy.

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