The European economy is in a brittle position with Greece's late decision to hold a referendum on the proposed bailout deal for the financially embattled country.

Greek Prime Minister George Papandreou has called the referendum and is now having to front up to French President Nicolas Sarkozy and German Chancellor Angela Merkel.

As eurozone leaders France and Germany have much at stake with a collapsed Greek economy likely to drag down the strength of their domestic economies as pillars of Europe.

IRG BOP investment advisor Jonathan York examines the situation and what it could mean for New Zealand investors in this week's market update.