What can they think? After a sleepless night where detail was discarded for the merits of a result, Merkozy must be overwrought at the bodyblow dealt to them by George Papandreou. Presented with the cost of bailout versus default in strikes, riots and the destruction of the Greek middle class, the Prime Minister could not continue to support European solidarity. The blubbering was not long in coming:
The Dutch Labour party called the referendum a "deal breaker" and said it would not support the Brussels accord if it were put to the vote. Jose Blanco, the spokesman for the Spanish government, said Greece's referendum was "bad news for Spain and bad news for Europe"
Recycling debt through the special purpose vehicle of the EFSF and preventing credit writedowns was considered more important than the obligatory impoverishment of one or more Eurozone members. Which politician will take such punishment for his fellow elites? Are we surprised that Papandreou made a sudden break for freedom with a democratic invocation. The referendum device was totemic, since its primary purpose was a figleaf of decency if his government lost a vote of confidence.
Constitutional doubts apart, politicians in the debt zone can no longer be relied upon to shore up the Merkozy. Torn between elite and electorate, the latter wins hands down. That being so, the debt crisis now embarks upon its most dangerous phase: political co-operation is no longer believed, yet we all wait for the actions of politicians to deal with their own crisis: and we will know their mettle when Italy crosses the finish line of market denial followed by the toppling of the banks.
