In early-September, UBS published an analysis (pdf) of what would happen if any countries decided to actually try and leave the Eurozone. Their basic argument is that however bad you think that would be for Europe, it’s likely to actually be much, much worse, with consequences that are both further reaching and more chaotic than a cursory assessment of the situation would suggest. It is, unfortunately, a very convincing paper. Here are the parts I found particularly interesting.
-- “The economic cost is, in many ways, the least of the concerns investors should have about a break-up. Fragmentation of the Euro would incur political costs. Europe’s ‘soft power’ influence internationally would cease (as the concept of ‘Europe’ as an integrated polity becomes meaningless).”
-- “The Euro should not exist. More specifically, the Euro as it is currently constituted with its current structure and current membership – should not exist. This Euro creates more economic costs than benefits for at least some of its members – a fact that has become painfully obvious to some of its participants in recent years.”