In Greece Has the Crisis Already Commenced?

     Some say yes:

     "More than a third of the country's ATMs ran out of cash, banking sources told Reuters, amid widespread fears Greece would soon be ejected from the 12-nations that use the euro currency.

"It's not a question to see what might happen on Monday. In terms of a crisis (for Greece), the crisis has commenced," Irish Finance Minister Michael Noonan said after the day's second meeting."

    "Greece is due to pay the International Monetary Fund 1.5 billion euros Monday and without a deal this weekend risks missing that payment.Christine Lagarde, that organization's managing director, sat down with CNBC to discuss the situation."

    http://www.cnbc.com/id/102791542

    I've suggested the last 2 weeks that the Greeks may be better off with leaving the euro. 

    http://diaryofarepublicanhater.blogspot.com/2015/06/does-greece-have-bad-hand-in-eu.html

    However, after making this point in the comments section at Dean Baker's CEPR, Gar Lipor makes a good point. That might be right in the long run but the short term adjustment to a new currency could be very painful. 

    "I am afraid of Grexit for the Greek people. Not in the long run. All reasons you give why they will be better off outside the euro are sensible ones. But leaving a currency is different from devaluing an existing one. It takes time for a payment system in a new currency to meet international standards, and international trade (something Greece is unusually dependent on) mostly requires electronic fund transfer to meet rigorous standards. Internally Greece is much more a cash economy than the USA or most of the EU, but a cash economy dependent on ATMs. And again it takes time to adapt ATMs to a new currency - that is after you have printed it. A state without a currency is in a very similar position to a stateless person - a person without a recognized nationality. So getting through that year or 18 months it requires to get a currency operating is added hell in addition to the normal short term hit an economy takes from devaluation."

    http://www.cepr.net/blogs/beat-the-press/who-s-afraid-of-grexit

   Check out Lipor's own blog. 

   http://www.solvingtheclimatecrisis.com/

   So maybe this is the classic short term vs. the long term choice:

    1. In the short term they'd be better off staying in

    2. In the long term they'd be better of stepping out. 

    Until now, Greece has been unwilling to walk out. Maybe some of that is due to the natural sense of short termism that all humans have? However, as Krugaman notes, this time the script might just be flipped. Maybe now the unthinkable will finally become not just thinkable but happen:

    "Until now, every warning about an imminent breakup of the euro has proved wrong. Governments, whatever they said during the election, give in to the demands of the troika; meanwhile, the ECB steps in to calm the markets. This process has held the currency together, but it has also perpetuated deeply destructive austerity — don’t let a few quarters of modest growth in some debtors obscure the immense cost of five years of mass unemployment."

     "As a political matter, the big losers from this process have been the parties of the center-left, whose acquiescence in harsh austerity — and hence abandonment of whatever they supposedly stood for — does them far more damage than similar policies do to the center-right."

     "It seems to me that the troika — I think it’s time to stop the pretense that anything changed, and go back to the old name — expected, or at least hoped, that Greece would be a repeat of this story. Either Tsipras would do the usual thing, abandoning much of his coalition and probably being forced into alliance with the center-right, or the Syriza government would fall. And it might yet happen."

     http://krugman.blogs.nytimes.com/?_r=0

     Correct. This is what the Troika has been banking on-that Tsipras would go as all that preceded him. They've been waiting for him to simply accept the agreement they had with the man he beat in his election. Of course, if he does this and he suffers the fate of his predecessor will the Troika even send him a fruit basket?

    "But at least as of right now Tsipras seems unwilling to fall on his sword. Instead, faced with a troika ultimatum, he has scheduled a referendum on whether to accept. This is leading to much hand-wringing and declarations that he’s being irresponsible, but he is, in fact, doing the right thing, for two reasons."

     "First, if it wins the referendum, the Greek government will be empowered by democratic legitimacy, which still, I think, matters in Europe. (And if it doesn’t, we need to know that, too.)"

     "Second, until now Syriza has been in an awkward place politically, with voters both furious at ever-greater demands for austerity and unwilling to leave the euro. It has always been hard to see how these desires could be reconciled; it’s even harder now. The referendum will, in effect, ask voters to choose their priority, and give Tsipras a mandate to do what he must if the troika pushes it all the way."

      "If you ask me, it has been an act of monstrous folly on the part of the creditor governments and institutions to push it to this point. But they have, and I can’t at all blame Tsipras for turning to the voters, instead of turning on them."

     Good for him. The Greek people can make this difficult decision themselves-and therefore they too will now be accountable for whatever the results of their own decision. They have to choose between long term and short term pain. 

    Sumner always says there's no such thing as public opinion in economics, but I think this choice of Tsipras to go with public opinion is inspired and the only way out.