So Papandreou having trouble at home, he decides (at this late point) to put the choice to a referendum, but that might not be until January. Nevermind that he probably won’t get that long; it seems to be another case of a government trying to delay the pain as long as possible.
It is clear that the other European governments felt stabbed in the back, in that they thought that they took a hit last week, on top of their own referendums of last month. So it looks to them that Greece is trying to get better terms after the deal has been struck. For sure, some one will say “Okay, the 50% haircut is off the table,” and when that happens the Euro will fall some more.
The point is everybody knows that the Greeks have known for quite some time what the choice is. One, repudiate the debts, leave the Euro, accept an inflated currency, an inability to get foreign financing and therefore a stagnate economy for years. Or two, accept that there will be across the board wages, benefits, entitlements cut for the lucky few who keep their jobs, and a depressionary environment for years Not a nice set of choices, but they’ve known this for a while. Why do you think they have been out in the streets. There is also the possibility that a leftist party will be voted in, but that fact won’t solve the problem that the country is bankrupt.
The point is the referendum, if it does take place, will not be decisive. It is only kicking the can down the road. In the end, I suspect the Euro to hold, but maybe with some less members (for now). It will hold because it is better for most of Europe to function as an economic union, even if it is imperfect. I know another imperfect union which is working on its third one hundred years, and whatever they say, I think there are few Southerners who regret losing the war.