(its my dreadful share positions you know, always making me think things can't get worse when I know they always can) that last weeks Euro deal would hold until February. Most of the comments here said it would be lucky to hold two weeks - turns out they were wrong too, we did not even hit 5 trading days.
And the the cause of the cataclysm - an outbreak of common sense. The Greek Prime Minister is sick of seeing opinion polls saying that the populous are against the Austerity measures, but no much else. His Finance minister sums it up thus:
“I can no longer look at polls where the majority is against the agreement, the majority is against the program, but a majority is also in favor of staying in the euro,”
There is no choice on the list for this, either they follow the European austerity plan (a terrible idea which will leave the country in penury) or they default and leave the Euro (50% GDP loss, all pensions lost, but a clean slate to start - probably worse than the first option). Thus a referendum will be held to decide if they want to pass the austerity budget.
It is very proper that the Greeks of all people should put this to a vote, the huge lack of democracy in Europe Union is its single largest failing as an entity.
This is some ways (not for the markets, they seem braced for a heart attack) a great result. The Greek protesters will be forced into making a grown-up decision. The Socialists willing a Utopian paradise will instead have to choose between the terrible and the disastrous.
Finally, MerKozy can do what they should have done before, prepare the financial firewall to support Italy, Ireland and Spain and speak to Portugal about holding an referendum of their own about Euro membership/austerity. With that a real solution will be found that will allow Bond rates to normalise.
Otherwise, 2012 is going to make 2008 look like a picnic.