Stock markets, gold and oil rose yesterday after Greece’s Finance Minister George Papaconstantinou told the EU’s finance ministers that, “there’s no actual need for a bailout.” But other moves suggest this is nonsense.

It’s seems odd that just one ex cathedra claim of stability by Greece’s finance minister should’ve calmed everyone down yesterday: nothing else (apart from the worsening economic situation) in the country had changed at all.

Behind the headlines, Europe is now involved in a dangerously headless fight about what (if anything) should be done to help the Greeks out of their self-created mess. Swedish Finance Minister Anders Borg refused to rule out help for Greece from EU nations outside the eurozone – thus putting a spoke in Gordon Brown’s wheel. And the sensational move to suspend Greek financial voting rights marks a constitutional first for the EU.

Greece can claim it doesn’t need help, but the other EU states are still adamant that it needs to try harder. The Austrians are pressing hard for tougher measures aimed at deficit control, and the Germans want Greek votes suspended on all EU matters.

In a series of leaks late last night, ECB insiders described a hardening line at the central bank, saying ‘Greece will not be bailed out’. These are fine words….but a long way from Greece doesn’t need a bailout. Bankers will talk tough, but as the Slog suggested last week, politicians don’t like rioting electorates.

There was (allegedly) an increased ‘risk appetite’ on the world bourses yesterday. They would do well not to take any on the Euro. You read it here first: the Euro’s revival is strictly temporary. Greece (and at least four other EU states) need help. An EU arguing about whether it should help or not will be no help at all….and legally, the IMF can’t intervene in a country whose very sovereignty has been diluted by events.

Financially, the EU has begun a descent into financial chaos. The descent may be slow, even staccato – but it has started, and it must take its course.