I am enjoying watching Sarky Merkel squirming and blustering over Mr Papendreou's intention to put their bail out to the Greek people. I am not surprised. The bail out is about saving imprudent French bankers who lent to Greece without doing their due diligence and the face of the Euro establishment. Its the Greeks who will have to pay and they don't want to The opinion polls say they want to stay in the Euro. Simples! I want it but I don't want to pay for it.
I opined many months ago that the Euro crunch would come when the wishes of the EU ie Sarky Merkel came into conflict with the interests of national politicians seeking re-election and Athens. That is what is now playing out in Cannes.
Look you Greeks says Sarky Merkel decide now if you want to stay in the Euro and if you don't give us the right answer your not getting your promised €8 bn. So Mr P seems to have had a change of heart, no referendum and and Dave and Nick type coalition. What will tomorrow bring?
The despised Anglo Saxons who run the international bond markets on hard nosed logical lines are not impressed. The Italian 10 year bond now yields 6.16% and the French bond spread to Gilts is now 0.76%. The Chinese are not playing ball and the EFSF offering has been left on the shelf. Zut alors!
The Greek's will still call the shots because they can bring the whole EU house crashing down any time they choose. Bismark would have mobilised the Prussian army by now. I would not rule out a Greek army coup and a Greek default. They have done both before more than once. This story has legs.