…and in turn improve our exports, giving us some chance of escaping the recession with a tiny bit of economic dignity.

Our Euro-abstinence could also help us (by the skin of our teeth) avoid the embarrassment of cheerleading the rest of the world into the next global crisis by being at the centre of the PIIGS mess…

Baseline Scenario: The IMF cannot help in any meaningful way. And the stronger EU countries are not willing to help – in part because they want to be tough, but also because they do not have effective mechanisms for providing assistance-with-strings. Unconditional bailouts are simple – just send a check. Structuring a rescue package that will garner support among the German electorate – whose current and future taxes will be on the line – is considerably more complicated.

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As this pressure mounts, we’ll see cracks appear also in the private sector. Significant banks and large hedge funds have been selling insurance against default by European sovereigns. As countries lose creditworthiness – and, under sufficient pressure, very few government credit ratings will hold up – these financial institutions will need to come up with cash to post increasing amounts of collateral against their derivative obligations (yes, the same credit default swaps that triggered the collapse last time).

Remember that none of the opaqueness of the credit default swap market has been addressed since the crisis of September 2008. And generalized counter-party risk – the fear that your insurer will fail and this will bring down all connected banks – raises its ugly head again.

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That’s not to say in this scenario we won’t be drowning in Europe’s wake. We will. If Europe becomes the Titanic, the Greeks will be on the bridge; we will just have the chance to rearranging deckchairs on the stern before, inevitably, we follow them into the icy depths…But as we are sinking our own captain can be laying the blame at someone else’s door once again.