Forget about Greece for a moment. Just think about country X, which has lived well beyond its means for years thanks to loans from inattentive or foolishly optimistic lenders. When the crunch comes, the X-people will have to cut back on spending. And the X-lenders will generally suffer from the famous rule of banking: "Can't pay, won't pay."
The Great Debate UK
A week ago we ran a post on MacroScope noting, in part, that Britons have a strange relationship with the euro, sometimes bordering on disbelief that it exists at all. Some new numbers from the monthly Bank of America Merrill Lynch fund managers poll underline the extent of UK scepticism compared with that of others.
Britons have never really got the euro zone. "Its not really going to happen, is it?" was a typical question from a City analyst to Reuters back in the mid-90s. The political drive behind the creation of the monetary union was beyond many in eurosceptic Britain.