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Shares rise on hopes of vote axe

European stock markets have advanced strongly amid mounting expectations that a Greek referendum on a European bailout plan will be abandoned.

Markets were also cheered by a surprise rate cut from the European Central Bank.

In Athens, several ministers and governing party MPs called for Greek prime minister George Papandreou to step down in favour of a coalition national unity government that would approve Greece's bailout package without a referendum, and ensure the country receives vital funds to prevent imminent bankruptcy.

Mr Papandreou is holding an emergency cabinet meeting.

"Markets have rallied .... on the expectation that the referendum will be cancelled," said Louise Cooper, markets analyst at BGC Partners.

Britain's FTSE 100 was up 1.3% to 5,553. France's CAC-40 rose 3% 3,203 while Germany's DAX was 3.1% higher at 6,151. Athens' main stock market outperformed, rising by 4.8%. The euro was also buoyed, rising 0.6% to USD1.3773.

Wall Street appeared set to head higher, with Dow futures rising 1.2% to 11,906. Broader S&P 500 futures added 1.2% to 1,249.

Markets were thrown into turmoil on Monday after Mr Papandreou's referendum proposal. It horrified Greece's international partners and creditors, triggering market worries that Greece may default on its debts and exit the eurozone.

Earlier, French President Nicolas Sarkozy and German Chancellor Angela Merkel of Germany acknowledged the once-unthinkable: the possible exit of Greece from the euro.

Saying that Europe had "done everything we could" to keep Greece in the eurozone, Mr Sarkozy told a joint press conference: "Now it is up to them to decide if they want to stay in the euro with us."


From Belfast Telegraph