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Greek stock exchange continues to collapse after the prime minister George Papandreou’s bomb that he wants a referendum on the future of the financial assistance to the country. It closed with a negative result of 0.93% and 745.64 basis points, while the turnover remained at 47.41 million euros. The spreads of Greek government bonds is 2680.7 bps and generally, there is a major nervousness on the European financial markets. According to Financial Times, stock exchanges are swaying between the danger that the Greek debt crisis would become irreversibly a pan-European and the hope that by the end of day, the Federal Reserve would announce measures to strengthen the US economy anemic growth.

At the same time, Papandreou’s decision of an extraordinary referendum has seriously complicated the negotiations for the conditions of private investors’ involvement in the Greek debt haircut. German bankers have uttered their voice first and said that there was nothing to negotiate for relieving the Greek duties before the country decides what to do. "We cannot imagine exchanging the debt before the referendum," was adamant Michael Kemmer, head of the Association of German Banks. He said he would expect high private holders’ involvement in the exchange of the Greek debt and that such decisions could not be taken hastily. Kemmer pointed out that in the first draft of the agreement when the voluntary haircut was fixed to 21%, the involvement of private institutions holding Greek government bonds reached 90%.

Recent political events around Greece have seriously complicated the driving of the European Financial Stability Facility (EFSF). It had to be activated and release 10-year maturity bonds in the amount of three billion euros, which had to be carried out this Wednesday. This would be the first issue after adopting the decisions of the summit on October 27 this year when European leaders have decided that the European Financial Stability Facility should have a supply of at least one trillion euros to sustain the continued debt crisis pressure on euro area states.

The funds from the pending issue were provided to finance the European aid to Ireland, which is doing much better than Greece in fiscal consolidation and structural reforms. According to market sources quoted by Reuters, the issue will be held within the next two weeks, when all hope waters around the Greek question will trouble. The last bond issue by the European financial mechanism was held on June 22 this year when 5-year bonds amounting to three billion euros at an interest rate of 2.75% were issued.