Thinking more about the Greek situation last evening, I realised there was one thing I hadn’t said — and which is picked up today by the news reports.

Papandreou clearly knows that in order to make the rescue deal work he has to take the Greek people with him. But that ain’t about to happen just because he (or anyone else) dictates the deal. So they have to agree voluntarily and than means getting them to vote in favour of the deal. Hence he has to hold a referendum — however much is pisses off Merkel and Sarkozy. Fortunately the Greek Cabinet seem to have got the message.