The real concern is Italy

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Stock markets seem to be happy now that Greece's leader has called off the referendum on the European debt deal. Thing is, though, some observers have been arguing for time – and they continue to assert – that Greece has become a sideshow to the sovereign-debt crisis. The real problem is Italy, where rising bond yields suggest that the country is going to be facing a debt crisis of its own.

As Felix Salmon argues: "Greece is going to default and leave the euro; the only question is when. And when it does, the EU will find that its protections against contagion are about as effective as that $1.6-billion tsunami breakwater in Kamaishi. Greece can fall and the eurozone can still survive. But Italy – which is just as politically dysfunctional as Greece – can't." And that could mean the end of the European monetary union.

The Economist sounds almost as bleak: "Should the [Greek]government fall, a snap election will be held, and something will happen. One strongly suspects, based on the almost shocking placidity of markets, that a new government will come in and implement the cuts demanded of the country so that we can all move on to the next phase of the crisis, which is sure to hit any day now, probably about 600 miles to the northwest."

Shocking is probably the right way to describe the reaction from stock markets. Aren't stocks supposed to hate uncertainty? Yes, the European Central Bank took its key interest rate down a notch and U.S. initial jobless claims fell below the 400,000-threshold (for whatever significance that has). But with Europe on the brink and leaders scrambling to hold things together at the G20 meeting in Cannes on Thursday, you might think that stock prices would be reflecting some nervousness about the immediate future.

But no: After a mid-morning stumble, the Dow Jones industrial average is up 1 per cent. The CBOE Volatility index, or VIX, which tends to reflect investor anxiety, has fallen 7 per cent from its mid-morning high and is down slightly for the day. And the yield on the 10-year U.S. Treasury bond – one of the key haven investments – has ticked above 2 per cent after falling for four consecutive days.