PASOK wins the Greek Election

OK, so the euro seems stable because the dollar's slump--the other drunk in the room--has it pinned against the wall. The Europeans are full of themselves, and the depression has stabilised in Italy, previously the most vulnerable point in the system.

There may well have been a temporary Atlantic sobering, which I didn't anticipate, as overprinted money moves out of shares, and into bonds rather than banks or spending. This won't last and I still think at some point that governments in the UK and US should worry that they will not sell their debt; presumably they have rounded up the usual suspects to buy loads of it in return for the US and UK buying or subsidising loads of theirs.

It's a measure of how mad the world is that such behaviour would be the least dangerous action at the moment; it suggests that the economy will stay slumped, but won't quickly fall further until the unemployment and debt defaults really start to bite. Those, too, have been staved off by money printing and the pretence of things like the TARP scheme and its unaudited spawn.

But what happens when Greece, more or less bankrupt, starts pumping money and fake jobs into the economy like billy-o, whilst ignoring all its euro commitments to spending cuts and tax rises and so on, and fails to deliver? Does it suspend its euro membership? Can it?

What do Spaniards, trapped at the other end of the sea but sharing depression and a futile government and demographic collapse, do when they see that happening? Or Italians?

And what do desperate Greeks, some of whom have turned to bombs and revolutionaries do when it all kicks off?

When does northern Europe say 'enough is enough'?

Many of those concerned with the European project are fixated on the Czech republic and Poland this weekend. I would suggest that they turn their eyes to another faraway country of which we know little, watch, and learn....