What in heaven's name is Greek Prime Minister George Papendreou thinking? After winning passage of some tough austerity measures in Parliament - at considerable political cost - Papendreou now intends to place the terms of the bailout on the ballot.

New York Times:

The proposed ballot measure would put Greek austerity measures - and potentially membership in the euro zone - to a popular vote for the first time, risking Mr. Papandreou's political future and threatening even greater turmoil both among the countries that share the single currency and further afield.

His announcement sent tremors through Europe's see-sawing markets on Tuesday, with bank stocks taking a particular hammering because of their exposure to Greek debt. At midday, the German DAX index was down by 5.3 per cent while the French CAC 40 had slipped by roughly 4.2 per cent. In Britain, which is not a member of the euro zone but trades heavily with continental Europe, the FTSE 100 index was down by around 3.2 percent.

President Nicolas Sarkozy of France was expected to speak with Chancellor Angela Merkel of Germany by phone during the day on Tuesday to discuss the referendum, which took both leaders by surprise, Agence-France Presse reported. The French president was said to be "dismayed," according to Le Monde, citing an unnamed confidant of Mr. Sarkozy.

The German Finance Ministry deflected questions in a statement early Tuesday, saying that the call for a referendum "is a domestic political development on which the German government has no official information yet and which therefore it will not comment on."

Talk about a hard sell...

If Papendreou's intent is to give citizens a stake in the future of Greece as a member of the euro zone he is liable to be sadly mistaken. The angry demonstrations that rocked the country last week reflected the belief that austerity be damned, we want our cradle to grave bennies, and a job for life. People in Greece don't care that the government is out of money. And they are probably going to discover the consequences of that singular fact when the government can't pay their salaries or provide services.

Exit question: Should the Greek people have it in their power to destroy the European financial system and perhaps ours?