Greece is not the "next Lehman," writes Paul Krugman. It's not "big enough or interconnected enough" to cause that scale of global mess, or even yesterday's nightmare on Wall Street. But don't be too reassured. "Greece’s problems are deeper than Europe’s leaders are willing to acknowledge," he writes in the New York Times, predicting not only default for Greece but the "unthinkable" action of dropping the euro.
For a preview of how that would play out, recall the crippling bank runs in Argentina in 2001 when it ended its peg to the dollar. "If something like that happens in Greece, it will send shock waves through Europe, possibly triggering crises in other countries," writes Krugman, who has long been skeptical of Europe's ability to sustain a single currency. "But unless European leaders are able and willing to act far more boldly than anything we’ve seen so far, that’s where this is heading."