Last week, I welcomed the outcome of the ‘euro crisis’ summit in Paris with cautious relief. Not only where there results – which was more than some expected – but many including myself believed that we finally had a deal that would stick. However late, ultimately it seemed that Europe’s statesmen got their act together and delivered just about enough rope to allow the EU to haul its way out of the quicksand of spiralling public sector debt.

Indeed, the injection of capital into the euro bailout fund, the 50% haircut on privately held Greek government debt, and measures to strengthen the resilience of banks, could have been enough to see Europe right through its economic drama; if not, then at least enough to keep Greece from playing such a prominent role. At the time, the agreement reached should have been enough.

But the fact that it was thrown into question so easily by wanton political tactics in Greece, only days after the deal was wrapped up, shows that what should have been Europe’s saving grace proved a mere palliative for markets – and one with short-lived effects. Greek Prime Minister George Papandreou’s surprise decision to hold a referendum on whether to accept the deal he achieved for Greece at last week’s summit, however laudable in principle, wrecked the very deal for which he sought a popular mandate.

Markets are now jittery; EU governments are frustrated, and the Greek government is teetering on the edge of collapse. Now that the Prime Minister has withdrawn his offer of a referendum, not even the Greek electorate is happy. Worse for the eurozone’s leading governments in Paris and Berlin, they have now been reminded that the greatest challenge they face is not approval from the markets but approval from Europe’s citizens – for markets don’t get angry, hold grudges, or elect the opposition. And if markets are unpredictable then the results of referendums are hardly less so.

We don’t know yet why the referendum was called off. Many have rushed to point an accusatory finger at Greece’s creditor nations, indicting them for placing their financial interests above the need for the deal to have a democratic seal of approval. But the truth is likely more complex than that. Members of the Prime Minister’s governing party likely had more influence on his decision than Chancellor Angela Merkel or President Nicolas Sarkozy’s warnings. The reality is that Prime Minister Papandreou faced a mutiny in his Cabinet. If he hadn’t called off the unexpected referendum his government would have collapsed, leaving Greece to a worse fate and leaving him without a job.

Now that there won’t be a referendum – at least, not until the Greek Prime Minister changes his mind – the measures that the Greek government agreed to last week can be salvaged. While the Greek people might have rejected them in a referendum, their parliament is not expected to do so. The question, however, is will last week’s deal be enough now that the euro’s credibility has suffered another blow? Indeed, the Greek Prime Minister’s political brinkmanship may ironically lead to a stronger government majority in the Greek parliament by creating a government of national unity with the county’s centre-right party – though Prime Minister Papandreou would likely have to step down.

Roping in the Opposition would improve the government’s ability to implement the measures that will keep the country from economic collapse. However, Papandreou’s tactics, though they may have inadvertently set the stage for a stronger Greek government, have not only inflicted damage on the euro and on global markets, but have caused the country’s political system to suffer a crippling blow to its credibility. Not only is the Greek government seen as unreliable by Greek citizens but now, more than ever, it is seen as a less than credible partner by other governments.

Eurozone members are compelled to keep Greece afloat because the damage that its collapse would wreak on our own economies far outweighs the costs to us of keeping the country solvent. But for countries that aren’t tied to Greece through a common currency, the odds of investing in Greece no longer add up. The Chinese government was almost persuaded to step in to Greece’s aid – perhaps we would have been too proud anyway to accept an emerging market’s help – but, following Prime Minister Papandreou’s surprise referendum, the Chinese quickly made their excuses and left Europe to deal with its own fate.

Indeed, it has always been down to us to save ourselves from the crisis but now there are no excuses left to make. I remain confident that Europe will get through this period of catharsis intact, and if it does then it will be stronger for it. But this won’t happen by itself, or with a bare minimum of effort. It is time Europe’s leaders begin to make real political sacrifices.

David Casa is a Nationalist MEP