Originally from the FT:
“All three party leaders in Greece’s teetering national unity government have opposed new austerity measures demanded by international lenders, forcing eurozone finance ministers to postpone approval of a new €130bn bail-out and moving the country closer to a full-blown default. Representatives of the so-called “troika” – the European Commission, European Central Bank and International Monetary Fund – have demanded further cuts in government jobs and severe reductions in Greek salaries, including an immediate 25 per cent cut in the €750 minimum monthly wage, before agreeing the new rescue. But representatives of all three coalition partners, including centre-left Pasok of former prime minister George Papandreou and the centre-right New Democracy of likely successor Antonis Samaras, said they were unwilling to back the government layoffs.“
Simply put, if Greece does indeed refuse to surrender their national sovereignty to the Troika (aka Germany), bailout funds will not be distributed…Meaning Greece will default.
The market clearly has failed to digest this, as the DOW is still up 142. But then again, with volume near record lows, all it takes is the idiot HFT algos to melt this market up.