Greece, not again?

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In the past, every time the situation has come to a head, Greece has caved. And, in the process, it has transformed itself into little more than a financial slave state mired in an economic depression. There is no way Greece will ever be able to cut its way to prosperity, Krugman argues. And history suggests that any argument to the contrary is crazy. Given that Europe refuses to restructure Greece's debt in a sustainable way and allow the country to try to grow its way out of its misery, Greece has no choice but to default and withdraw.

KRUGMAN: Europe is nuts, Greece is smart - Business Insider

Whatever the eventual outcome of the Greek debt talks, there are a number of judgments can already be made; one is that a large part of the blame for this ever deepening debacle lies at the doors of the International Monetary Fund, which from the very beginning has had both its priorities and its analysis of the situation hopelessly wrong.

IMF heads must roll over shameful Greek failings - Telegraph

From the start, the IMF’s involvement has been a succession of misjudgments and over-optimistic predictions that together both prolonged and deepened the eurozone’s wider failure. Yet there is one original deceit from which all the others spring; all along, the IMF’s approach has been much more about saving the euro than saving Greece. IMF programme countries are always subjected to harsh medicine – that’s taken as read. But also key to setting insolvent nations back on their feet is debt restructuring, usually involving some degree of forgiveness, and devaluation. Greece has had only a little of the former and none of the latter.

IMF heads must roll over shameful Greek failings - Telegraph

A Greek exit could lead to a humanitarian crisis on Europe's southern rim, spark contagion in euro countries that are only just emerging from years of deep recession, and stoke a fiery new debate about German austerity policies and Merkel's handling of the crisis. Allowing Greece to exit would be by far the boldest move she has taken since coming to power nearly a decade ago, far riskier than her decision in 2011 to phase out nuclear power. In private conversations Merkel has acknowledged as much, saying her biggest fear is that Germany could be blamed for "blowing up Europe" for the third time in a century.

Angela Merkel is facing her biggest risk yet with the 'Grexit' - Business Insider