Will Greece bolt the euro? And/or the EU? Can they make the choice on their own?

This really is a big deal:

Christian Reiermann, Athens Mulls Plans for New Currency: Greece Considers Exit from Euro Zone Spiegel International 05/06/2011

Christian Reiermann, Milliarden-Schulden: Krisentreffen zu Griechenland erschüttert Euro-Zone Spiegel Online 06.05.2011

As Paul Krugman has been pointing out for months, years actually, the current crisis hits the euro at is weakest point. The European Union economies are not fully integrated, but they share a common currency. Countries in the current situation of Greece and Spain could let their currency depreciate, if they had their own currency, and thereby revive their economies. As it is, they are effectively condemned to years of stagnation and high unemployment. And the European Central Bank is making it worse by insisting on tight-money policies, operating under ideas similar to the Herbert Hooverish ones that dominate the minds of the Beltway Village political and media elites right now.

As of this writing, Krugman hasn't weighed in on his blog about this particular news. But he addressed the problem in The Pain in Spain 05/04/2011:

Spain is stuck in the euro straitjacket. As I've pointed out on a number of occasions, e.g. here and here, the collapse of the housing bubble has left peripheral European countries faced with the need to deflate relative to core nations; this means years of stagnation plus intensified debt problems.

Tags: european union, greece, paul krugman