Yes it was much worse in 2011 and more destabilizing. The risk for contagion was high. Back then we had most of the Greek debt held by markets, that being in investment banks, corporates and the like. Now we have the Greek debt owed mostly to EU and IMF and the taxpayers in those areas so the risk of contagion is far lower.

The scenario of Greece exiting the euro monetary union is entirely unpredictable though. Not that Greece really matters with only 3% GDP of the Eurozone economies.

The main problem is on loss of credible stability in the EU and the idea that if one falls out more can surely follow. I think Greece’s heavy tactics do not go down well in the EU and they have to accept these are their debts and nobody else’s.

You have to give something back before you take, and if they accept some measure of austerity then that at least shows their creditors they are willing to take responsibility seriously. Unless they change structurally it is impossible that these debts will ever get repaid, and Germans know that.