We are approaching end-game. Greece is supposed to pay off its next tranche of debts on 17 October, and the markets are now expecting what this blog has long predicted: a large-scale default. It is conceivable that another rescue package will be put together, and the collapse deferred for a few more months. Either way, though, Europe’s banks are staring at a Lehman moment. This is the tempest long foretold, slow to make head but sure to hold.
All the options now are bad. The least bad is a swift and orderly unbundling of the euro, allowing Greece and the other peripheral countries to devalue and begin exporting their way back to growth. The worst is to deny reality, to stagger on as now, and so to ensure that the catastrophe is all the more terrible when it comes. No prizes for guessing which option Brussels wants.
Shakespeare, as I never cease to remark, has something to say about every subject, including the way Eurocrats have brought this calamity upon themselves:
The plague of Greece upon thee, thou mongrel beef-witted lord!