Carney lonely voice to praise Papandreou
Greek Prime Minister George Papandreou is facing a rebellion from within his own party for his controversial decision to hold a national referendum over the latest bail-out package from the eurozone, Bloomberg reports. Two lawmakers defected from Papandreou’s socialist Pasok party on Tuesday, leaving the PM with a razor-thin parliamentary majority of 151 seats in a 300-seat chamber. In addition, six Pasok members joined the choir of voices calling for Papandreou to resign. The PM’s surprise decision to ask the riotous Greek electorate whether it wants to accept $178 billion in rescue funds from the European Union and the International Monetary Fund sent financial markets across the world reeling on Tuesday. Investors fear a negative response from Greek voters would prompt a disorderly default in Greece that could in turn spread to other debt-ridden and much bigger economies such as Italy, where sovereign borrowing costs hit a euro-era high today. Bank of Canada Governor Mark Carney, on the other hand, was a lonely voice praising Papandreou for seeking “widespread support” on a measure that requires austerity policies that will affect the country for a long period.