The stage was almost set for a bail-out to dig Greece deeper into its hole of debt and everyone would pretend the problem was solved for another week or two worth of stock trading days. The deal was contingent on Greece following through on an austerity package which would require only giving everyone in Greece nine free cupcakes at taxpayer expense instead of ten. The Greeks, being Greek, have been rioting over the proposed too-small-to-solve-the problem cuts in government services and benefits.
The Prime Minister actually got me. I didn’t see one coming for the first time in a while! He decided to punt and put the austerity measures to the People of Greece in a special election. Then he dismissed the top brass in the Greek military. My first thought was that he probably fears a coup d’etat, but he could also be planning one. Either way, the stock traders didn’t like this news at ALL. So we’ll see: either the deal is on and the Greek economy is sunk less quickly as part of the Euro zone, or the deal will be voted down and Greece will have rather more of a “hard default” than had been anticipated, and get kicked out of the Euro. They would likely pick up the Drachma again, which would immediately be worthless. Their unsustainable government would be forced to shrink, and the Greek economy would be sunk more quickly than otherwise.
Then Portugal, Spain and Italy will hold hands and hope together that nothing bad happens for long enough that their economies will recover . . . somehow . . . .