Greek Tragedy

     About the only thing you can say about Greek politics is that compared to them even ours doesn't seem as bad, they are truly unstable whereas ours mostly just flat out don't work at all. The word that best sums up U.S. politics is gridlock-nothing gets done, but even if it does it always takes to the eleventh hour while realizing the maximum level of brinkmanship in the mean time.

     In Greece on the other hand we will soon have a new government of some kind or another-a new "coalition."

     To keep up with what's happened in Greece over the last week is not for those who nose bleed easily. Last week it had seemed that the Eurozone had finally agreed to a bailout plan which allowed for a 50 percent haircut on Greek debt.

     All of a sudden, wholly out of left field, Prime Minister George Papandreou had announced a referendum on the bailout deal to be voted on. This was so unexpected that even his finance minister was sucker punched.

     This led not to an immediate vote for the referendum which would have taken months but, a confidence vote for Papandreou. He narrowly won this but has now agreed to step down in lieu of the new coalition government between his Panhellenic Socialist Movement (Pasok) party which are locked in negotiations with opposition New Democracy over forming a new government, without Papandreou at the head.

    For his part, Papandreou appears to really have been smarting under so much public disapproval. Say this for him: public opinion mattered to him and he hated being so unpopular.

    The signs seem to point to the idea that Greece will not consider leaving the Euro as was suggested by Pandreou's call for the referendum.

    "Pavlos Yeroulanos, Minister of Culture and Tourism in the current regime, told CNBC that leaving the single currency would not solve its problems and ruled out a referendum on Greece's membership of the euro zone in the near future."

    He also criticized as "irresponsible" recent statements from "eurocrats and politicians" about the state of the country and its future in the euro. While he did not name any politicians in particular, recent comments from Prime Minister of Luxembourg Jean-Claude Juncker that other euro zone leaders are "not saying Greece has to stay a member at all costs" increased speculation that the country would return to the drachma.

     http://www.cnbc.com/id/45187513

  All of which might seem to bode better for the rest of Europe as it seems to mean that there is no danger of rejecting the rescue package. I say "seem" because at this point it's never so easy to really know what anything means in the endless saga of the Eurzone crisis.

 In any case, world wide investors are not celebrating this today, they have a new worry-Italy.

 http://www.cnbc.com/id/45191575

  This worry about Italy is even roiling the gold market. With Papandreou down, the next one trying to play his last cards is Italian Prime Minister Berlusconi.