It was clear to us that there were always likely to be further hiccups following last week’s Euro Debt Agreement. If the naivety of asking the Chinese to contribute after having effectively announced that Europe would be dependent upon them to do so wasn’t enough to cause jitters, the Greek PM has clearly caught everyone (including Merkel & Sarkozy) by surprise with his decision to seek a referendum. The markets reacted badly to the uncertainty (as they always do) and there is a very real possibility of the debt deal falling apart. The fact that there is open talk of the Greeks leaving the Euro tells you the severity of the situation.

From an investment perspective, it is always important to look beyond the hyperbole, and of course making sure we are not making knee-jerk reactions that are in any case one day too late! Our assessment this morning draws on one telling piece on the news last night; four Greek citizens were interviewed and asked if they were in agreement with last week’s debt deal and they were all vehemently against it, and the austerity measures, and would definitely vote against them in a referendum. When the same people were then asked if they wanted to leave the Euro, they all equally strongly stated ‘no’.

Whether the referendum goes ahead or not, we do not know, but if it does we suspect by then the question will be whether the people wish to remain in the Euro or not. This being the case, we think the Greeks on the street understand which side their (pita) bread is buttered.