Yet if leaving the euro is unthinkable, the risk of default by a country that stays in has clearly gone up.

ECONOMIST: The euro: High tensions | The

The risk of devaluation was gone and the chance of default seemed tiny, to judge from the markets' judgment that bonds issued by thrifty states were barely worth any more than those of profligate ones.

ECONOMIST: Charlemagne: The name's Bond. Eurobond | The