Yesterday's conference call between Sarkozy, Merkel and Papandreou has offered the markets short term respite (in the form of a modest dead cat bounce).
However, it changes nothing as it was but a mere restatement of wishes and hopes. France and Germany offered their full support for Greece remaining in the Eurozone. However, they pleaded with Greece to implement the promised economic reforms as a way of stabilising the Eurozone.
Papandreou tried to convince the French and German leaders that Greece would follow through on its promises.
All very nice, maybe.
However, even if the three callers were comforted by their promises, the markets will need more than a comfort call to convince them that anything substantive will come from this. There is no plan, merely platitudes, reality will set in and Greece will default and leave the Eurozone.
BTW, tomorrow is the 19th anniversary of the UK being kicked out of the ERM.