The situation in Europe is deteriorating fast.  Reminder;  this matters at this blog because of the sovereign risk impact to banks who are the largest holders of Euro debt including Greece.  A default would potentially mean the 50% write down goes to 100%.  At this point, today, its hard to argue against that.  Politicians in Greece are no less delusional than American ones when it comes to the power/ impact/ influence of financial markets.

Government in Greece Teeters After Move on Referendum | NYT

Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France, apparently caught off guard by Mr. Papandreou’s call for a referendum and then by the disarray in his party, said they would hold emergency talks on Greece with euro zone leaders on Wednesday.