Interesting commentary by Robert Peston.

Or to put it another way, the rescue does not promise a bright new dawn for Greece any time soon. Or to put it another way, the only way for the referendum to be won by Mr Papandreou would be for him to demonstrate that the alternatives are far worse.

For the rest of the world, those alternatives look shockingly bad.

They could include, in no particular order of probability or potentially devastating impact on the stability of financial market, default by Greece, exit by Greece from the eurozone or a much more generous rescue deal.

Let’s examine these.

A decision by the Greek government to renege on all its debts would impose huge losses on European banks, the European central banks and European taxpayers.

Such a default would raise the spectre of default by other over-indebted eurozone governments, which in turn would undermine the perceived solvency of some very big banks. We could be back in the territory of paralysis of the European financial system.

Or Greece might decide to quit the eurozone, so that the exchange rate would be able to fall to a level that would allow the Greek private sector to compete.

This could have the spurious attraction that it would mitigate the ostensible fall in Greek wages necessary for recovery.

But its impact on markets could be even worse than a default, it could be a default on steroids: if it became accepted that membership of the eurozone isn’t forever, huge doubts would arise about the true value of hundreds of billions of euros of contracts.

There is an even grimmer alternative Peston doesn’t mention: a military coup in Greece.