It was Greece's call for a referendum, and then the outcome, that increased the risk of a Greek exit from the monetary union. Many now assume that a Greek exit is the most likely scenario. We suspect that many misunderstand the incentive structure, and under-estimate the political will to ensure EMU remains irreversible. We argue that there a no pleasant choices left for both creditors and Greek people. Some kind of debt relief is going to take place. It can come either in an uncontrollable and disorderly way or it will be negotiated and managed. The Greek people may have voted against creditors' conditions, but are ... (full story)