The Greek tragedy is reaching a tipping point. Yesterday, we published an open letter written by a group of economists making the case for a European solution. After the Berlin meeting, it has become clear that Angela Merkel intends to stick to her position and won’t be pushed into quick action. Given the dramatic pace with which this crisis is now pushing Greece towards default, this might well mean help – if and when it comes – will be too little too late.

If a Greek default cannot be avoided, would Greece leave the Euro and go back to a national currency that it could devalue? Is this even possible or desirable? Here is what economist Paul Krugman has to say about the possibility of a Eurozone breakup:

any move to leave the euro would require time and preparation, and during the transition period there would be devastating bank runs. So the idea of a euro breakup was a non-starter.

But now I’m reconsidering, for a simple reason: the Eichengreen argument is a reason not to plan on leaving the euro — but what if the bank runs and financial crisis happen anyway? In that case the marginal cost of leaving falls dramatically, and in fact the decision may effectively be taken out of policymakers’ hands.

Actually, Argentina’s departure from the convertibility law had some of that aspect. A deliberate decision to change the law would have triggered a banking crisis; but by 2001 a banking crisis was already in full swing, as were emergency restrictions on bank withdrawals. So the infeasible became feasible.

Think of it this way: the Greek government cannot announce a policy of leaving the euro — and I’m sure it has no intention of doing that. But at this point it’s all too easy to imagine a default on debt, triggering a crisis of confidence, which forces the government to impose a banking holiday — and at that point the logic of hanging on to the common currency come hell or high water becomes a lot less compelling.

And if Greece is in effect forced out of the euro, what happens to other shaky members?

I think I’ll go hide under the table now.

Given the indecisiveness of European (and especially German) political leadership, I think I’ll join Krugman under the table.