In a few hours as bond markets open Italian and Spanish spreads (among others) shoot through the ceiling making servicing them impossible. The ECB will then intervene despite not being supposed to, and / or the Greek government will be under tremendous pressure to rescind the referendum so that in a couple of days at most, either they will have capitulated (most probable) and / or a new summit will be called. The EFSF not being large enough for Italy, the French spreads will rise further. In the meanwhile bank runs start to form in Greece, Italy, Spain and possibly Portugal and Ireland. The destabilization of the Eurozone will be complete and Papandreou will be coerced into cancelling the referendum or explaining that it will really be about something else entirely. Or he acquires a spine - unlikely as it might seem now and plunges forward towards... well somewhere more hopeful than where he and Greece are now...

In the case he backs off, he might even lose the confidence vote in Parliament in a few days' time, but anyway social upheaval and political pressure will force him to elections which he will lose eventually, and either a Right/ Far Right coalition will emerge (in a parliament that will include a Nazi party at its right) or a Right / Socialist coalition, or (unlikely) a left coalition. These are scenarios that will result in an even harsher police state, the delegitimization of mainstream politics and the breakdown of existing eurozone plans as far as Greece is concerned respectively.

In the meanwhile, the crisis will continue after a brief respite and, barring Merkozy seeing the light and completely changing course, will result in the break-up of the Eurozone sooner than expected. Thus Papandreou has just accelerated developments in the world economy by trying to survive politically (and the way things are going, physically) at home...

Likelier scenario: Greek government rescinds the referendum tomorrow or the day after, bond spreads having skyrocketed, tumble back to lower levels, but obvious political instability in Greece keeps stoking the crisis, and together with other aspects of reality bring the Eurozone to an existential face off...

The road of excess leads to the palace of wisdom - William Blake