This week, much has been made of the possibility that it is looking increasingly likely that Greece will be forced (or choose) to leave the euro. While some have been saying for a long time (years) that the Eurozone will be fine without Greece and that Greece (eventually) will better off with its own currency, this is just now coming around to being recognized. Why?

For starters, conventional wisdom has the tendency to become entrenched; even more so when it is self-interested conventional wisdom. Europhiles have seen a Greek-exit from the euro (and maybe even the E.U., although this is unlikely) as breaching the principle that entrance into the euro (and the E.U.) is a one-way decision that can never be reversed. They see this principle of “no-exit” as key to holding together their vision of a politically/economically united Europe that will be a global player in a multi-polar world along with the U.S., Russia, and China. With it breached, they fear that the Euro (and the E.U.) could unravel (again, not likely). Consequently, they have been keen to play up all the horror scenarios that could happen if Greece were to leave the euro/E.U. The latest one is that pushing Greece away from the West could be geo-politically to Russia’s advantage. The idea that an economy that represents about 2% of the E.U. could cause global contagion and therefore needs to be kept on what amounts to a permanent welfare program was always unconvincing. It would be as if Vermont, Montana, Rhode Island, Wyoming, South Dakota, and Maine decided that they were going to use a currency other than the dollar, and there was fear that would cause the dollarzone that is the United States to collapse. The comparison isn’t exact as the U.S. is much more politically integrated than is the E.U., but if a marginal economy in the E.U. has the power to blow everything up economically, then the situation is so unstable that something else is going to come along in the future that would have the same effect.

The second reason why it has taken so long to be recognized is that the world (financially speaking) is a more stable place that it was a few years ago. While I personally am skeptical that there was ever a danger of ‘contagion’ from Greece that would have blown up the Eurozone/E.U., the fact is that with Spain, Portugal, and Italy apparently on more solid footing, the idea that investors panicked by Greece would end up forcing more countries out of the Eurozone has become much more remote. A few years ago, the possibility of a Grexit could roil financial markets. Today, it doesn’t seem to do it that much.

Thirdly, this recognition has also been driven by an acceptance of the fact that Greece will never get out the mess that it is in without either A.) a massive forgiveness of the debt that it owes, or B.) an exit from the Eurozone (or C. both). As time has gone on, it has become obvious that the longer the inevitable is postponed, the worse things will be when the inevitable finally happens. Greece never should have been let in the Eurozone and effectively defrauded its way in. If the E.U. had kicked Greece out of the Eurozone at that time this was discovered when the world was an economically strong footing, they wouldn’t have been throwing good money after bad all these years. But they decided to hope that Greece would eventually become Eurozone worthy. But it never has.

Finally, this recognition has come about by the lessening of a psychological effect that allows people to not see things coming simply because it hasn’t happened before. For example, nobody foresaw WWI happening, even though it seems obvious to us in hindsight. Likewise nobody believed that the Holocaust was actually happening because they could not imagine a regime being that vicious. Finally, the collapse of the Soviet Union was completely missed by everyone (especially the CIA) because it had been a fixture on the global stage for so long that nobody could imagine a world without it. Likewise, the idea of a country leaving the Eurozone has been seen as ridiculous, mainly because it hasn’t happened before. After Greece exits, whether next week, or next year, or the year after, its exit will be seen as obvious in hindsight as WWI and the Soviet Union’s collapse.