As European cut off all aid payments to Greece, the Euro has fallen to a three-week low. Asian stocks and U.S. equity futures also saw significant losses.
German and French financial leaders now hold several emergency meetings in Cannes, France, and have withheld 8 billion euros of assistance. Greece was warned not to vote against the bailout package, but failed to heed the EU leaders’ warnings.
“The market is eventually going to send Greece an incremental message about the jeopardy and hazards of going in alone and punching out of Europe,” Erik Ristuben of Russell Investments told Bloomberg Television. “It will be a very negative event in our minds, economically, for Greece even more so than the austerity measures that core Europe is pushing on them.”
The euro fell 0.3% when European leaders stated that the upcoming referendum will determine Greek’s fate, and whether it will be the first to exit the 17-nation currency bloc. Prime Minister George Papandreou, now faces a confidence vote, and continues to defend his decision to call a referendum.