It may seem unthinkable, but somehow I guess Germany would think twice before insisting on the path of doom should a country like France or Italy make a credible exit threat.

I think this is very much a mistake. Threats are always unpopular. The German government is also under substantial political pressure. The only way I can think of that Germany would agree to changing the rules for the Eurozone is if our own economy goes badly.

Otherwise I think threats will be counterproductive.

But there is an even more important problem with hinting that you will leave the Euro: Your Banks will be destabilized. In principle the only non-destructive way to leave the Euro, would to do it suddenly without telling anybody beforehand. This again, would be politically very unpopular basically everywhere.

Cyrille:

somehow I guess Germany would think twice before insisting on the path of doom should a country like France or Italy make a credible exit threat.

Eggzackly! It calls their bluff, basically, and would force them to reveal why they really want the status quo to continue, as the journalistic pressure steps up.

Been believing -and saying- this for years here.

Greece had zero heft. Italy needs to do it soon, or the state of the nation will be so parlous that it will be an even bigger mess, whether in or out of the Euro.

It's either bleed to death or make one last effort before all strength to do so is gone...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

I would say yes and yes, also. In theory.

If a small country (like mine) decides to live the Euro, then there will be a massive assault on that country to prove it was a "wrong" decision. Being dependent on 80% of imports of what you eat and also dependent on non-electric energy would make it easy to bring on a intended catastrophe.

And yes, if a small country like Greece decides to exit, I believe that the EU powers will make sure to make of it an example.

For this thing to be sorted it has to be Italy (where my hopes are) or even Spain.

I completely assume that I would like Marine to win in France. She is the only one with balls to face the situation. Send a snake to a snake-pit kind of argument.

Checking tradingeconomics.com Portugal, Spain, Italy and Greece now all has small surpluses. (France still has a deficit, though it has decreased.) So now should be a good time to leave, as many euros goes in as comes out which decreases the risk of runs and shortages.

This is odd, Germany still has its huge surplus (7.5% in 2014). The eurozone itself shows a distinct surplus for the first time. Checking the numbers:

Euro Area Current Account | 1997-2014 | Data | Chart | Calendar | Forecast

Euro Area recorded a Current Account surplus of 31 EUR Billion in September of 2014.

Germany Current Account | 1956-2014 | Data | Chart | Calendar | Forecast

Germany recorded a Current Account surplus of 22300 EUR Million in September of 2014.

So Germany's surplus was about 2/3 of the Eurozones surplus. But who is allowing an undervalued euro? China?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

These are very interesting points. Could you please put these into a diary?

The exact nature of the changes you want has not been spelled out

Unless and until Article 123 of the Treaty on the Functioning of the European Union (Article 104 of Maastricht Treaty) is repealed, all the rest is cosmetic. Of course, Germany will never accept that.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

A few comments:

rz:

German economists are crazy and the economists advising our government are the worst of the bunch.

No objection from this quarter :)
As you've noted elsewhere, some Germans have exposed it as such (but if it's written in an English paper, even the FT, does it really count?).

rz:

The French economic weakness is a myth.

No objection either, but would the hypothetical new French currency not devalue against the German one? I doubt the respective economic strengths (and the more dynamic French demography) would be enough to prevent an appreciation of the eventual new DM, if only for Deutschmark fetishism in a lot of financial circles. After all, if policies were mostly driven by facts, we would be in a very different situation, wouldn't we? Let's not forget that markets can remain irrational longer than we can remain solvent...

rz:

the real income of Germans would rise. they could go cheaper on Holidays, they could by cheaper goods from the rest of Europe and so on.

As good as it would be for German people, especially those with the lowest incomes, an over-appreciated currency would be a catastrophe for a German economy entirely oriented towards exports: a lot of companies would be hurt, not necessarily the big conglomerates who already have facilities outside of Germany, but the Mittelstand certainly. "Real income" with respect to what? Imported goods? Precisely what an export minded leadership wants to limit at all costs...

Lastly, I don't think the "credible threat to leave the Euro" is the only option for other EZ countries: never mind the fact that, barring a Le Pen elected French president, it is totally unlikely to happen, what with the current EU leaders enthralled with the austerian fairy tale. As you rightly pointed out, threats do not work well, especially with a German leadership (and a German population to a large extent) living in the parallel Swabian housewife universe. Grandstanding never works in the EU, as a British PM is finding out.

Another option is to quietly refuse to apply the full austerity straitjacket. There will be of course a lot of furor, and possibly scathing editorials from German EU commissioners (oh, wait...), but, in the finest EU tradition, no frontal crisis: just long winded horse trading negotiations ending up into some "new consensus", the details of which being difficult to predict from here.

Lastly, there's the - not entirely unthinkable - possibility that the first country to pull the metaphorical trigger won't be Greece or Portugal or Italy, or even France: Germany might well beat them all to the punch. Especially if the EU commission fails to strictly enforce full-metal austerity from Lisbon to Tallin and the cries of currency debasement and Weimar inflation upon us grow increasingly louder in Germany. This would actually provide a perfect vindication to the "lazy Southerners who cannot be trusted" theme

To quote Migeru:

Migeru:

I'm pinning my hopes on AfD.

The "summer series" 'End of the line for the Euro', a political fiction published by Le Monde over the summer of 2011, might even end up to be true after all :-)