Barry Eichengreen asks himself why his influential analysis, suggesting that the euro was irreversible now appears wrong. Surely in a direct, mechanical sense what we’re seeing is the process I warned about five years ago:

Think of it this way: the Greek government cannot announce a policy of leaving the euro — and I’m sure it has no intention of doing that. But at this point it’s all too easy to imagine a default on debt, triggering a crisis of confidence, which forces the government to impose a banking holiday — and at that point the logic of hanging on to the common currency come hell or high water becomes a lot less compelling.

But doesn’t the ultimate cause lie in wild irresponsibility on the part of the Greek government? I’ve been looking back at the numbers, readily available from the IMF, and what strikes me is how relatively mild Greek fiscal problems looked on the eve of crisis.

It has been obvious for some time that the creation of the euro was a terrible mistake. Europe never had the preconditions for a successful single currency — above all, the kind of fiscal and banking union that, for example, ensures that when a housing bubble in Florida bursts, Washington automatically protects seniors against any threat to their medical care or their bank deposits.

Leaving a currency union is, however, a much harder and more frightening decision than never entering in the first place, and until now even the Continent’s most troubled economies have repeatedly stepped back from the brink. Again and again, governments have submitted to creditors’ demands for harsh austerity, while the European Central Bank has managed to contain market panic.

But the situation in Greece has now reached what looks like a point of no return. Banks are temporarily closed and the government has imposed capital controls — limits on the movement of funds out of the country. It seems highly likely that the government will soon have to start paying pensions and wages in scrip, in effect creating a parallel currency. And next week the country will hold a referendum on whether to accept the demands of the “troika” — the institutions representing creditor interests — for yet more austerity.

NEW YORK – The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.

Of course, the economics behind the program that the “troika” (the European Commission, the European Central Bank, and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25% decline in the country’s GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60%.

OK, this is real: Greek banks closed, capital controls imposed. Grexit isn’t a hard stretch from here — the much feared mother of all bank runs has already happened, which means that the cost-benefit analysis starting from here is much more favorable to euro exit than it ever was before.

Clearly, though, some decisions now have to wait on the referendum.

I would vote no, for two reasons. First, much as the prospect of euro exit frightens everyone — me included — the troika is now effectively demanding that the policy regime of the past five years be continued indefinitely. Where is the hope in that?

Until now, every warning about an imminent breakup of the euro has proved wrong. Governments, whatever they said during the election, give in to the demands of the troika; meanwhile, the ECB steps in to calm the markets. This process has held the currency together, but it has also perpetuated deeply destructive austerity — don’t let a few quarters of modest growth in some debtors obscure the immense cost of five years of mass unemployment.

As a political matter, the big losers from this process have been the parties of the center-left, whose acquiescence in harsh austerity — and hence abandonment of whatever they supposedly stood for — does them far more damage than similar policies do to the center-right.

•    ΠΟΛ.1130/25.6.2015 Παράταση προθεσμίας υποβολής των δηλώσεων φορολογίας εισοδήματος φορολογικού έτους 2014 φυσικών προσώπων μέχρι την 27η Ιουλίου 2015 , νομικών προσώπων και νομικών οντοτήτων μέχρι την 20η Ιουλίου 2015 των άρθρων 3 και 45 του Ν. 4172/2013
•    ΕΤΕΑ παράταση υποβολής ηλεκτρονικών αρχείων μέχρι 31-12-2015 http://www.etea.gov.gr/tempsite/

I’ve been staying fairly quiet on Greece, not wanting to shout Grexit in a crowded theater. But given reports from the negotiations in Brussels, something must be said — namely, what do the creditors, and in particular the IMF, think they’re doing?

Το 390 π.Χ. ο Βρέννος αρχηγός των Γαλατών, κατέλαβε την Ρώμη και απείλησε να την καταστρέψει.

Τότε οι Ρωμαίοι προσπάθησαν να τον μεταπείσουν προσφέροντας σαν αντάλλαγμα χρυσό, άργυρο και άλλα πολύτιμα. Ο Βρέννος δέχτηκε, αφού καθορίστηκαν οι ποσότητες των λύτρων και έστησε μια ζυγαριά για να μετρήσει τις ποσότητες.

Μόνο που τα ζύγια φαίνεται ήταν «πειραγμένα» φυσικά υπέρ των Γαλατών. Οι Ρωμαίοι διαμαρτυρήθηκαν για την απάτη και ο Βρέννος εκνευρισμένος έβγαλε το βαρύ σπαθί του και το έριξε στα ζύγια, ώστε οι Ρωμαίοι υποχρεώθηκαν να κομίσουν και άλλο χρυσάφι!

•    ΠΟΛ.1125/16.6.2015 Τέλη Χαρτοσήμου κατά την εξόφληση των πρόσθετων φόρων και προστίμων

•    ΠΟΛ.1126/17.6.2015 Κοινοποίηση των διατάξεων του άρθρου 251 του ν.4281/2014 σχετικά με την απαλλαγή των μικρών επιχειρήσεων και παροχή σχετικών διευκρινίσεων

Larry Summers has written a scary column warning that Greece may be on the verge of becoming a “failed state”. It’s a useful corrective to the extraordinary complacency I’m hearing from too many European officials. But I do think it’s worth pointing out that this need not happen, even if there is no deal.

What Summers seems to portray is a scenario in which Greek banks collapse and take down the economy with them. But what if Greece abandons the euro and issues its own currency to keep cash flowing?