Since coming into office, the Athens government has relentlessly argued that Greek expulsion would inevitably trigger an unravelling of the monetary union, and ultimately deal a fatal blow to the European project itself.  Until recently this narrative had gained little traction, but as Grexit becomes the default scenario and media coverage more frantic, more commentators warn of a potential “Lehman moment” for the EU. They fear that Grexit would undermine public trust in the core values of the EU and turn the eurozone into a currency-peg arrangement, which will be unpicked by financial markets or populist political leaders seeking an easy way out. Even the German weekly Der Spiegel showed Merkel sitting on ancient Greek ruins, under the headline: “If the euro fails, so does Merkel’s chancellorship”.  It may be true that Grexit would be an unprecedented event in the history of European integration and raise a host of difficult legal questions. But the fears for the political sustainability of the euro are vastly overblown. In the short term Grexit would pose no existential threat to the eurozone, especially if it is done in a coordinated fashion.  Five years ago the risk of contagion from a Greek default and exit were real. Monetary union remained fragile, with a growing and high divergence in the borrowing costs between the core and periphery countries as investors fled for safety. But this time the markets’ reaction to last weekend’s referendum result has been muted, with the borrowing costs of Italy and Spain rising relatively little from low levels. The economies of Ireland, Spain and Portugal are in a much better shape as a result of structural reforms and fiscal consolidation.Moreover, the European Central Bank has become de facto lender of last resort with its OMT – outright monetary transactions – programme, flanked by new institutions and mechanisms such as the European stability mechanism and the banking union. The majority of Greek debts are held by public institutions, and the size and location of the potential losses are much clearer.

Any currency's value only reflects how it is perceived.  That credibility to state:   ''The Bank promises to pay the bearer on demand the sum of''.  Immaterial whether you call your currency a Euro, Drachma or a Turnip-Pie.  'Tis the degree of credibility that sustains its value not the name.  Greeks to be taken seriously must deliver that credibility to the markets and as such, not be viewed as mish-mash of political influences devoid of ''FOCUS''.  Can it do that .... Not easy .... But 'Yes' it can.  But it must be seen as adopting credibility as opposed to hoping something of the  Mr Micawber politics: albeit ''something will turn-up'' .... Because, one way or the other it certainly will?  Thus delivered: then it may well be the EU and the Euro that come under that FOCUS, if not already?  Greece might engage in this very activity - continuing to print Euros, while ceasing to take orders from the European Central Bank.  Nice idea excepting member state's central banks are not allowed willy nilly to churn out Euro paper currency.  Which is, of course, one of the two core flaws of the Euro mechanism. Any nation state operating a fiat monetary system has two essential levers to try and adjust their monetary economy: base rates and money supply. Excepting, of course with the Euro this is "Managed" centrally by the ECB; leaving only local taxation and sovereign borrowing for member governments, which is clearly not sufficient.  Trying to meld hugely disparate states into a One Size Fits All, monetary system simply doesn't and could not ever work: unless, of course, the successful Euro members are happy for their taxpayers to fund the cost of shipping buckets of capital to the impoverished - in relative terms - member states.  Seems now, as I forecast years back, the German taxpayers are simply no longer prepared to accept higher taxes and a reduced standard of living simply to prop up the basket cases.

Journalists are now starting to ask that awkward question, Is the EU really benign ? To draw a parallel, here is my response.  We've seen the EU control freaks demanding repeat referendums until they get their way on a national vote and we've seen them impose a president on Italy, what part of un-democratic process does it take before people wake up and realize the EU is not benign but a malignancy that is corrupting democracy.  The Common Market or EU long ago morphed into a life threatening polyp just like the one doctors found in my colon last year and luckily for me, unlike the EU, mine was still benign. However, I must have had it for several years as it had grown to the size of a large grape and had I left it any longer it could have  turned malignant just like the EU is today.  I had my polyp cut out just in time before it could have turned cancerous and made a full recovery and its time the countries in Europe cut out the cancerous parts of the EU before its too late. Remove that growing malignancy in  Brussels, make the EU the free trade area that was originally sold to us  and with luck the 'patient' might survive.  That of course is if we want EU to survive as some cancers have a nasty habit of returning !!!.. Everything you were warned about is coming true.  You were told you cannot tie together your disparate nations into one currency like some huge refugee raft and think it was going to work.  Greece is the proud  nation, and now that their skiff is going down, they're going to take you with it.  They've always been a problem from day one.  Cut 'em loose, and next time, you should listen when people tell you that you can't tie your sovereign nations together with other nations that you don't control electorally nor fiscally. . . .

Greeks are historically hard-working people, betrayed by banksters and their elected tools. The debt isn't THEIRS!! They live under a giant currency-swap turned loan-sharking scam, pushed onto these people without their consent. The people actually got 3% of the loaned money, the rest going to to JP Morgan and the rest.  In other words - only  an idiot can fall easily to whatever crap media feeds Europe ...

ECB - Christian Noyer said that Greece's debt cannot be restructured

Chancellor Angela Merkel's spokesman says Germany sees no basis at present for entering negotiations on a new bailout program for Greece. Steffen Seibert said Monday that Germany respects the "clear 'no' vote" by Greeks against austerity measures demanded by creditors and that "the door for talks always remains open." However, he said the conditions are "not there at present to enter negotiations on a new program." He said the "no" vote is a vote against the principle - still supported by Germany - that solidarity requires countries to take responsibility. Seibert says Europe will explore what possibilities there are to help Greek citizens and "a lot will depend on what proposals the Greek government now puts on the table." Regarding requests by Athens to restructure its debt, finance ministry spokesman Martin Jaeger said: "I can see no reason to enter into discussions."  Meanwhile, ECB governing council member Christian Noyer said that Greece's debt cannot be restructured. "Greek debt held by the Eurosystem is debt that cannot by its very nature be restructured because that would be monetary financing of a state," he said...The French advisor went on to say that Merkel had gone out on a limb to reach a compromise with Greece over a credit deal. 

"Merkel was very open to negotiations with Greece, showing patience and even a sort of maternal protection regarding Alexis Tspras," he said. France's Socialist government still hopes to avoid Greece leaving the euro, but France's opposition conservatives are now calling for Greece's orderly exit from the eurozone.  Alain Juppé from Nicolas Sarkozy's centre-right Republicans party, said: "Greece is no longer capable of sticking to the disciplines of the eurozone."

"We must help it to organise its exit without any drama."...Angela Merkel displayed "maternal protection" towards Greece's Leftist prime minsiter Alexis Tsipras who betrayed the trust of the German Chancellor and François Hollande - despite France's more conciliatory line with Athens, according to a French presidential aide. The comment comes as the French and German leaders are to meet in Paris at 6pm local time (5pm BST) to discuss the Greek crisis, followed by a working dinner at 7.30pm at the Elysée Palace.  The Hollande advisor's comment to AFP suggests France is hardening its line as facilitator vis a vis Greece and aligning itself more with Germany in a bid to show a united Franco-German front.  The aide admitted Hollande got his fingers burned after seeking a compromise with Greek PM Tsipras, saying: "It will be difficult with Tsipras. There's a real problem of trust between him and us and us and him."    Brussels to Greece: we're going to make your life much harder That was quite the press briefing from Commission vice-president Dombrovskis. In short, Brussels will not be giving the Greek government anywhere near an easier ride after last night.

Some points:

• "The place of Greece is and remains in Europe", but when pressed, Mr Dombrovskis did not repeat that Greece's place remained in the single currency

• Brussels questions the legality of the referendum and the nature of the question: it is "neither legally nor factually correct"

• The Commission will not carry out any talks with Athens before they get a mandate from the eurozone's finance ministers who are meeting tomorrow

• Greece's vague promise of debt relief as agreed back in 2012 is now no longer on the table after the second bail-out expired last week

• The No vote has made life much more "difficult" for the Greek government, but the ball is in their court to now come up with some credible reforms

No way Reichs Chancellor Merkel was going to allow one of the sub-members of her club to derail her project. Greece is owned lock stock and barrel by the EU. Suckers

Germany is at last bowing to pressure as a chorus of countries and key institutions demand debt relief for Greece, a shift that could break the five-month stalemate and avert a potentially disastrous rupture of monetary union at this Sunday’s last-ditch summit.  In a highly significant move, the European Council has called on both sides to make major concessions, insisting that the creditor powers must do their part as the radical Syriza government puts forward a new raft of proposals on economic reforms before a deadline expires tonight. If Greece stays within €uro this will help to bring down this damned currency within the next 5 years, as it will accelerate drain of liquidity, speed up moral hazard and force the counter measures of Mario "Printy" Draghi. Inflation and big bang sometimes.  If Greece leaves the €uro this will help to bring down this damned currency within 10 years as the other Austerity victims as well as moral hasard victims will learn, that there is a life beyond EU-summits, Brussels, ECB, ESM ESFM, EFSF, TargetII, LTRO and Juncker - a life in proudness and dignity (and a living within ones means, regrettably). At the end, when all nations left €uro, we will be back again in national currencies.

At what point will the EU recognise the futility of continuing with the Euro and their integration projects...by "democratic means"?

The best case scenario is the total collapse of the Euro and the EU.  This scenario is the one the French were banking on, that the Euro would deliver integration. Integration is a core belief and the Eu wont let go of this.  The Euro cannot succeed without integration and this was known at the start.  The problems that would ensue without it were known with uncanny accuracy at the start and they went ahead.  This latest situation is the EU still clinging to the belief that somehow or other they can force regime change (to who? to one of the EU puppet parties that Syrzia displaced?) that the project will continue till everyone agrees to hand over sovereignty. This will then rescue the Euro.  But even though the Euro has caused such problems the PIIGS were not amused by Merkel's 2011 call for integration and hence austerity measures designed not to help but finish the job.  And what success have they had? Ireland is even doing rather well .... but only for so long as they can set their own corporation tax. Italy SPain and Portugal seem to have become accustomed to the austerity measures so no doubt the EU is intending to tighten up. Or it was before Greece elected a "populist" party.  But the EU cannot allow for any country to recover from the damage of the Euro except through integration and they cannot accept any other path unless they give up on the idea. That they will not do if we consider the very timely publication of the new blueprint on integration published by Junkers Dieslbloem Tusk et al. and this surely must make clear to Cameron that his hopes of reforms and repatriated powers are a nonsense even if he were Tsipras which he is not.

The EU will undergo years of painful convulsions, precipitating a new treaty that imposes greater centralisation and restrictions on the fiscal independence of nation states"  Now, this was predicted years ago for the case when the real debt for the EU cluster increased faster than the real growth the debt being the current nuclear glue.  In theory, given the assurance of a cluster of states with very different economies, a single currency can only benefit a few or none a all and many economies cannot tolerate the level of the euro.  Greece and Ireland are hopeless cases where there is no possibility of either generating enough revenue to service and pay down the debt principle in less than several decades. The structural problems of the Greek and Irish economies are rigid and soon Italy will join in with talks and such over debt centered on forgiveness.  The Germans, who have a strong economy and run surpluses, have a fine structure with modest salary rates and are superbly suited to participate in world commerce using the euro. For this, they are unfair and seem to be the ones who should subsidize weaker economies just because they are successful.  This intractable situation persists and grows in the US states as well with California and other states having staggering debts although some 48 are presumed to have some balanced budget laws that prevent excessive debt. The credit ratings of California and Zimbabwe are identical in principle.  No wonder that many are fleeing to Bitcoins and other variants of money to escape the pregnant moment when their banks will close for a few days and then put in capital controls and lose much of their savings. There is really no option for many countries not to do this if Greek and Cypriot cases were handled with minimal blood shed or social unrest... The EU is risking the creditors money to play hardball and force regime change on Greece, to force the PIIGS to surrender sovereignty.   Instead of playing the EU's game and risking huge losses maybe it is for the creditors to stand up to the EU and impose their will.   It seems to me the EU is intent on brinkmanship in the hopes of bring down the Greeks and setting an example to the rest of the PIIGS.   The EU is using economics to play politics of the worst sort. "Economic Genocide" is the bets description I have heard so far of their malignant outlook.