Europe Should Call Greece's Bluff

In November 2011, I hosted a dinner for senior German bankers that was dominated by heated debate over the continuing Greek financial crisis. They were adamant that Greece should not again be rescued by Germany and its European partners or the International Monetary Fund. I argued that a further bailout was the only option.

It wasn't because I disagreed with their view that the Greeks were largely the authors of their own misfortune. I simply believed the European banking system was too weak to survive a Greek default. The turmoil that would follow, I argued, would pose a direct threat to the euro and the world economy. Contagion was simply too big a danger -- a view European Union leaders seemed to share when they announced the second Greek bailout a few days later.