A couple of rounds of competitive devaluation would provide such short-term relief.

But would we get that?

Historical experience points to "yes."

Absent shared physical coin and note, it is basically impossible for the states under deflationary pressure to deflate sufficiently to avoid depreciation.

"Political will" does not really matter when it is the will to accomplish mathematical impossibilities.

- Jake

Friends come and go. Enemies accumulate.

the local elites are hell-bent on insanity

The local elites are not hell-bent on insanity. The local elites are playing in a global world where workers are worth as little as they can get away with paying them, capital can move instantly across borders without taxation, politicians and policy can be bought to order, and no one gives a crap about any of that fairness or progress stuff.

The 'crisis' has been excellent for the elites everywhere. They're all much, much richer and more powerful than they were ten years ago.

Can we please stop thinking this is an accident, or that they don't understand what they're doing?

It's not even 'austerity' - it's the Euro and Anglo equivalent of the rise of the oligarchs during the end of the Soviet Union.

While everyone here is busy debating whether Krugman has a point sometimes, we've all been robbed at gunpoint.

But it would, I believe, require the threat by France to leave.

Or Italy, or both, or with Spain and (why not?) Greece. At that point it's Neuro&Seuro or bust, no?

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

Breaking austerity without breaking the Euro requires a supermajority of member governments to take a sufficiently strong stance against austerity. And that supermajority must include Germany.

And I cannot tell a plausible story about how to build an anti-austerity coalition big enough and powerful enough to bully Germany into unconditional surrender on the most important German foreign policy objective of the last forty years, without passing through a several months (or years) long stage where the anti-austerity coalition is:

• Big enough and strong enough to break the Euro.
  
• Big enough and strong enough to pursue anti-austerity policies outside the Euro.
  
• Not big enough and strong enough to dictate policy to Germany.
  
• Under extreme pressure from their own stakeholders to deliver on their anti-austerity promises in order to retain sufficient legitimacy to be able to effectively govern.

- Jake

Friends come and go. Enemies accumulate.