The CIA thinks Greece’s austerity measures might precipitate a military coup, according to German newspaper, Bild.
That might explain why prime minister George Papandreou has sacked all senior officers. After all, it’s less than 40 years since Greece was ruled by the military, with US backing.
If this thing unravels, who can say where it might end? Already, the Dutch, Germans and Finns have said that Greece is getting no more money, which means that the country is about to go broke. Papandreou’s announcement of a referendum seems to have more to do with fending off domestic political threats than with solving his country’s fiscal problems, but it now seems likely that Greece is going to default on everything, leave the Eurozone and go it alone. If that happens, European banks will be hit for the bones of €300 billion and then we’ll see what economists mean by contagion.