Greece

The unedifying sight of protesters hurling petrol bombs at armed riot police in Athens will have been seen around the world.

It is said that the Papandreou government has agreed terms with the IMF and eurozone ministers for the austerity package. But investors and existing creditors must be asking themselves whether Greece has the stomach for this fight.

Greek national treasure 84 year old Mikis Theodorakis, who composed the music for Zorba the Greek, has said this is a plot to turn Greece into an American protectorate. A chat show host now begins his programme with the German National Anthem and the sound of marching feet.

Whether they blame the Americans or the Germans or the whole of Europe, the Greeks are reluctant to blame themselves for their problems.

There will be another general strike on Wednesday, more violence, and we must now ask ourselves what will happen if the Greeks simply say no. Papandreou's government could fall. Failure to implement the austerity plan would result in tougher measures from the IMF. Greece could become a failed state.

This is looking very ugly indeed.