Greece! The Euro! Again!

The Greek bailout plan is null! says the Greek leader who did surprisingly well in Sunday's elections.

If the Greeks don't like the plan, they can get the hell out of the euro! says a German board member of the European Central Bank. (I'm paraphrasing here. He was a bit more diplomatic about it.)

Will Greece leave the euro? The world asks this question every six months or so, every time it looks like Greece may collapse into a mess of tear gas and unstructured default.

And each time the question arises, a Greek exit from the euro seems a little more plausible.

The risks of a Greek exit-default combo are still high. But they're declining over time.

The ECB has put in place measures that could allow it to support other European countries (Spain, Italy) that might come under pressure if Greece left the euro.

Most Greek debt is now held by the ECB, the IMF and the EU. So there's less uncertainty about who's holding the debt, and what the immediate impact of a Greek default would be. At the same time, the fact that Greece owes so much to those three makes it unlikely that Greece could both unilaterally default and remain in the euro.

As Greece's economy continues to deteriorate, the short-term costs of leaving the euro — a collapse of the Greek banking system and Greece's international trade, combined with even more austerity as foreign lenders refuse to fund Greek deficits — look somewhat less horrible.

And the long-term benefit — radically reducing its debt and devaluing its currency to make exports more competitive — looks more appealing.

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