I've been watching the news about Greece with genuine interest, as if we're witnessing some kind of constitutional moment that has the potential to radically alter the structure of the European Union. However I'm in the process of marking 90+ econ exams and one of the optional questions included a part about whether the student believe Greece would default. Of those who answered that question, every single one claimed this was "impossible", because the EU "wouldn't allow it".
I'm now feeling very foolish. Whereas I was keenly concerned about the credibility issue, and the will-they-won't-they dance that the EU are taking (appreciating that the stability of the Euro might require a bailout, but highly aware of the moral hazard argument) - if even non-specialist econ students don't believe a word of it, then how credible is it?
I don't feel enough "histories of the present" are undertaken, but here's one: in February 2010 everyone fully expected EU intervention of some sort or another. Whilst they scramble around to find a package (and a supervising authority) that can appear to be a "one-off", the consensus view seems to be that protestations about conditionality and austerity are hollow. Greece will remain in the Eurozone, and that's a contributing factor to why the problems exist in the first place.