There is now such political confusion in Greece, with splits opening up even within the government itself, that it is not possible to prophesy what will be the situation even by the end of today. Oddly however, the situation in the Euozone has become much clearer.
People can be masters of their own destiny and organise affairs to lead them in this direction or that. Procrastination and indecision eventually mean that destiny takes over and natural forces control events. There was a time when actual fiscal union on democratic principles could have been set up by the euro members of the EU. That moment has slipped by. The reality has now emerged. The Eurozone will be run by France and Germany and everyone else will have to do as they are told.
There is a massive ceding of sovereignty, not to some alternative authority in which all have an equal share, but to two countries, the most powerful, working together as what has become the Franco-German axis. They will now move to secure their banks against not only against Greece but contagion. That done they will sort out the rest. Already Greece is told no more money until you hold your referendum and then, no matter what your finance minister says, it has to be a Yes or No to staying in the euro. Significantly China agrees and is withholding support until the issue is decided. If the Greek government falls in the confidence vote tomorrow, its new government will be given the same message.
If Greece says no, it goes bust, as does every weak financial institution in Europe. If it votes Yes, then whatever government it has, is financially irrelevant. Greece will have to do as it is told. Once that issue is decided it is Italy’s turn. Then Spain Portugal and Ireland. The reasoning behind this projection of events is historic.
For the whole of the post reformation period tension in Europe has been driven by rivalry between France and Germany, the most powerful nations on the continent. Britain has played a decisive role backing either the one or the other, usually siding with the weakest against the strongest. This time, over matters Euro, Britain is not a player. France and Germany had a choice. They could divide; in which case the Euro would collapse. Or they could unite. There was a row. They looked into the abyss.
They drew back and chose unity. Now they are setting the agenda and the terms together. The Euro will survive for them and for their satellites. It will remain a powerful currency, but it will be the Franco-German currency which other countries use, but do not have a say in managing. The rest can take it or leave it, but Franco-Germany will take the economic and fiscal decisions.
That is unless all the countries in the Euro agree to pool their sovereignty into a new fiscal and economic union and that all the affected countries ratify the deal. This seems unlikely.