Yesterday, I posted that I was convinced that Greece would vote NO.
Yesterday, I said that the repercussions would depend on the bankers and on the oligarchs who own them. One of the determining factors, I said, would be the effect of the Greek vote on the euro. After a small, brief dip, the euro has held steady against the dollar. This tells me two things.
Secondly, the markets are also convinced that, when the Fat Lady does sing, Greece will remain in the Eurozone. The early general consensus being reported is that the Troika (the EU, European Central Bank, and International Monetary Fund) will come to a settlement near enough to Greek's terms to acknowledge Prime Minister Alexis Tsipras' victory and to cement Greek firmly into the fold.
On the surface, this might mean that there's more trouble ahead, that Italy and Spain might adopt the Greek tactic of threatening creditors and the stability of the Eurozone in order to work out a better deal on their debt. But I don't see it that way. If the Eurozone has backed down in the face of the relatively insignificant Greeks, can it afford to show backbone against more crucial Italian and Spanish economies, as weak as those economies may be? I doubt it. (Portugal? Too small to matter. GDP about the size of Greece. Spain's is 5 times Greece. Italy 8 times.) So now that the German-led program of austerity as medicine has taken one hit, it will almost certainly take more. And Merkel will put on a happy face and pretend to like it.
So there you have it. Greece stays in the Eurozone, as do the other debt-ridden economies. Once the banks begin printing money to ease Greek austerity and make
good at least a portion of Greek debt, (and then perhaps Portuguese, Spanish, and Italian debt) the euro may indeed sink to parity with the dollar. But that's a story for another day.