Amen CanuckExpat
To be honest, I am an index investor as well, and as a Dutch citizen, the Greek situation has me worried immensely. I also really don't like the resolution.
As I haven't experienced a market crash, or the type of uncertainty like this nearby while I was invested in the market I did withdraw some money from the indexes over the past month. I will take this as a learning experience to gauge my risk tolerance, and revise my asset allocation. Without a proper frame of reference and my emotional reactions, I think I was too aggressive in my initial allocation (80/20).
That said, money I withdrew also has another goal (buying a house) in the near future (2-3 years) so that was a way of justifying it for myself as well.
I know my actions were not rational as advocated here on the forums, but I also need to learn to behave rationally and know this is a major pitfall in any strategy.
I still do have a substantial amount invested (40% of the original amount) but I am still combatting the Greed/Fear duo.
As for the 'resolution' for Greece, this is a terrible midway solution. I think us as Europe should either bite the bullet and initiate a European tax system, -or- let go of the Euro as a whole, and re-introduce local currencies or north/south currencies. I like the first solution best, and can see a staggered introduction of that, by initiating the EU fiscal system, and having Greece as the first country which is in that system. Any future country that fails to meet the criteria in the stability pact for a longer period of time (say 5 years) then can be integrated into that system. It will mean a transfer of weath from the richer countries to the poorer, but hey, that's how the US functions as well? Germany also needs to sell stuff to Italy and Spain, and guess what, those countries aren't exactly powerful themselves.
To be honest, I am very very doubtful the suggested set of measures will pass Greek Parliament.