Nightly News   |  November 03, 2011

Europe’s crisis threatens world economy

The turmoil in the Greek economy is sending shock waves around the world, now that the Greek prime minister has backed away from his call for a popular referendum on Europe's bailout package. NBC’s Michelle Kosinski reports from Athens.

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BRIAN WILLIAMS, anchor: Overseas the world's attention is again on Greece tonight where that potential economic time bomb is sending shock waves around the world. Under pressure the prime minister has refused to resign but he has backed down on a proposal that had angered a lot of people. Our report tonight from NBC 's Michelle Kosinski , who's in Athens . And, Michelle , I imagine it feels rather dicey right now?

MICHELLE KOSINSKI reporting: Hi , Brian , right. Greece has been in financial and political turmoil. But tonight it really hit a tipping point. The prime minister amid high level calls for him to resign called off his plan to put last week's massive crucial European bailout of Greece to a popular vote. Now, the thing is, if this did go to a referendum and people voted no on the bailout, that would likely mean economic collapse here, a default on huge debt and an abandonment of the euro. So it's left other European powers saying what are you doing? We agreed to bail you out, you institute reforms. The alternative would be just more economic instability that of course threatens to resonate across Europe and even into the US. So now Prime Minister George Papandreou says, 'OK, if all opposition parties work together, agree to the bailout and the extremely unpopular austerity measures, then there won't be a referendum.' However, he now faces a confidence vote in Parliament tomorrow. He has a one person majority. And tonight, Brian , analysts see his government as on the brink of collapse.

WILLIAMS: Michelle Kosinski in Athens for us covering that story tonight. Michelle , thanks.