One more experiment in Keynesian economics. The politics of living within your means are what they are. The Greeks have reason to believe that they can blackmail the rest of the EU into funding their debts. But literally in this case, where will the money come from?

Syriza’s demands for a debt restructuring have raised the prospect of a stand-off between Athens and other European leaders that might lead to “Grexit” although financial markets were treating that as a marginal risk on Monday.

The potentially disastrous consequences of such a move for Greece and Europe were likely to force policymakers to find an agreement, analysts said.

So they’re beggars? So what do they care? You want to save your precious Euro, this is what you got to do? However as Daniel Hannan notes:

It would, indeed, be very difficult to make an economic case for euro membership.

The past six years have seen a greater depression in Greece than that of 1929 to 1935. Output is down by an almost unbelievable 25 per cent. A quarter of all Greeks – half of all youngsters – are unemployed, and tens of thousands more have emigrated in search of jobs.

Their currency is overvalued and market disciplines are almost invisible. If they leave the Euro, there are actually things they might be able to do.