Markets saw their biggest falls in three months as it became clear that the Greek sovereign debt problem has not been completely resolved yet despite a huge three year â‚¬110 billion loan programme.
The Euro also continued to fall as doubts remained as to whether countries such as Portugal and Spain can now escape the debt contagion completely. it is now at its lowest level against the dollar for over a year.
The deal, thrashed out on paper and hailed and welcomed by all has not received the same reception where it matters most, with the people of Greece.
Without the full support of the vast majority of those living in Greece the austerity measures called for as a requirement of the three year loan programme will never be seen through. However good or bad this is people power in action.
When called upon to take the medicine the people of Greece gave their answer by declaring a general strike. Greek public sector workers have even stormed the Acropolis and there have been scuffles with riot police after the launch of the 48-hour strike against the austerity measures.There are also fears that this could develop into nationwide unrest.
Using a sort of Elisabeth Kubler-Ross model of the five stages of grief – denial, anger, bargaining, depression then acceptance – you could put the Greek people at the anger stage, well behind that of their government. The job of the members of the Eurozone, IMF and Greek government is to convince the people that acceptance of and adherence to the austerity measures are the best way forward for their beleaguered country.
There have been suggestions and even recommendations that the best course of action for Greece is to withdraw from the Euro, re-instate the Drachma and default on the loans. But this has its own problems as any Drachma MkII would almost certainly be virtually valueless on the international markets.