But that would immediately open up a space, which the financial markets would immediately use to begin a speculative offensive.

Then you cut their balls off, by identifying the aggressive market participants and cutting off their Greek credit lines. You can't short a currency without access to its domestic credit market. And the Greek government controls access to the Greek credit market.

The Commission will scream bloody murder, and the banksters will sue in the European courts. But by the time the case reaches the last judge, everybody will have forgotten about it.

It would trigger a cycle of devaluation,

A real risk.

inflation

Potentially. Beats austerity.

and austerity

Nothing short of a foreign naval task force in Aegean can force the Greek government to engage in austerity policies if they don't want to. They may have to live with a patch of inflation. But that still beats austerity.

On top of that, the debt, which until that point had been denominated in euros or in dollars would suddenly increase as a result of this devaluation.

Convert the debt at some more or less fictional official exchange rate when you do the  currency swap. The bits you haven't defaulted on explicitly, that is. Nothing short of a naval task force in the Aegean can force Greek residents to repay debts that the Greek government is unwilling to enforce.

Every left government which decided to take measures in favour of the working class would certainly be put under enormous pressure by international capitalism.

So you cut the banksters' balls off. Capital controls, bank confiscations, confiscatory taxes on wealth, unilateral repatriation of Swiss and Cayman Islands bank accounts. And all the other little dirty tricks that aren't used in polite company, but which a country with nothing to lose can indulge in to its heart's content.

The point here is that Greece is being pillaged and burned. And not even necessarily in that order. You have options other countries don't, because all the bad things that will or might happen if you leave the € are still less bad than what the IMF is doing to you as we speak.

- Jake

Friends come and go. Enemies accumulate.