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Europe (with ECB's support if necessary) won't let Greece default.

Can you say moral hazard much? The EU really doesn't need to set a precedent for the mismanaged economies of the south dumping their debt on the strong economies of the north.

That's nice rhetoric, but the fact is that there's no us and them, there's only us. We've had a monetary union for about a decade now - we opted-in on sharing each others pains.

Krugman thinks the euro was a bad idea to begin with, you might find that interesting to read: http://krugman.blogs.nytimes.com/2010/02/05/the-spanish-trag...

True, but the Greeks opted in on fiscal discipline too... Oh, wait.

I'm sure the ECB have that uppermost in their minds. OTOH, I'm sure many Greek politicians would like the Germasn and French to pay their debts.

That's forbidden by the EU treaties (probably Maastricht treaty, or so).

The IMF could help. But it would be humiliating.

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