Max Johnson: 'Every danger the medicine will kill the patient'

With the Greek economy in intensive care, the Athens government finally has the mandate it needs to prescribe more bitter economic medicine.

The eurozone is now likely to approve a second bail-out but there's every danger that the medicine will kill the patient.

Few Greeks look like they will take it lying down, either.

The popular anger convulsing the streets of Athens with strikes and protests will surely get worse.

There is every possibility that poorer Greeks, who will be hit hardest by the austerity measures, will simply refuse to pay their taxes.

If that happens the prospects of a Greek default will go from highly likely to inevitable, plunging the country into the abyss and undermining any benefit the austerity measures may have had.

The euro strengthened to an eight-week high against the pound in the hours before the vote, but this was down to market expectations that eurozone interest rates will be raised next week. European Central Bank president Jean-Claude Trichet has dropped some heavy hints.

But this is smoke and mirrors, based less on economics than a desire to divert attention from the elephant in the room.

The fact remains that there is no agreed mechanism for a eurozone member to leave the single currency.

When, not if, Greece defaults, they'll have to think of one.

This will create uncertainty that can only send the euro one way - through the floor.

• Max Johnson is business development executive at foreign exchange specialists Currency Solutions.