The three perilous options for Greece facing Europe

http://www.ft.com/intl/cms/s/0/a3a91496-18b8-11e5-8201-cbdb03d71480.html?siteedition=intl#axzz3dt2f99dj

20150623  By Gideon Rachman.

 The choice seems stark. But the truth is that all three routes may ultimately lead to the same destination : the destruction of the European single currency.

1. Greece win : Those concessions would involve writing off some of Greece's debts and allowing the country to abandon some reforms, such as further cuts in pensions and higher taxes. The governments of countries such a s Ireland, Portugal, Spain and Latvia - which have stuck with their austerity programs - would be instantly undermined. Radical left parties similar to Syriza, such as Podemos in Spain, would gain ground. The presence of nationalist and far-left parties at future EU summits would make it truly impossible to reach decisions. At that point, the survival of the EU itself would come into question

2. Grexit : Greece defaults on its debts and then probably leaves the euro. In the short term,  the eurozone might be able to avoid contagion since the ECB has programs in place that allow it to buy unlimited quantities of eurozone countries' bonds, forcing interest rates back down again. In the long run, however, that is unlike to be guarantee against debt cries. The political effects of Grexit could also be disastrous for the EU.

3. Grecce folds : Unfortunately, there are no guarantees that even this route would lead the EU to a safe destination.

• Greece's debts look close to unpayable, so there are likely to be further debt cries in year to come.

Most important of all, the Greek crisis has exposed the fact that the euro is a fundamentally flawed project. Historically, currencies that are not ultimately backed by nation state have collapsed.