A look at history makes a case for loan default and Grexit

THE first sentence of the 1957 Treaty of Rome, the founding document of what would eventually become the European Union (EU), calls for "an ever-closer union among the peoples of Europe". Recently, however, that ideal has come under threat, undermined by its own political elite, which adopted a common currency while entirely neglecting the underlying fault lines.

Today, those cracks have been exposed - and widened - by the long drawn-out Greek crisis. And nowhere are they more evident than in Greece's relationship with the International Monetary Fund (IMF).

When the euro crisis erupted in 2010, European officials realised that they lacked the necessary expertise to manage the threat of sovereign defaults and the potential breakup of the monetary union. For EU officials, avoiding the eurozone's collapse became the top political imperative, so they turned to the IMF for help. The irregularities in the Fund's resulting intervention attest to how serious the eurozone's problems were - and continue to be.