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Will Greece leave the eurozone? Will Germany squawk loudly but bail them out in the end? Matt Yglesias answers with this headline today:

On Greece, Everyone’s Bluffing—Including the Greeks

The headline is sort of spoiled by writing a post to go with it, because in a way it says all that needs to be said. This is what makes it so hard to figure out what everyone is up to. After all, if you’re doing a good job of bluffing, the whole point is that your bluff will seem extremely reckless and credible, especially to outside observers like me. My own guess is that the underlying dynamics — Greek government chaos, public opinion in Germany, small country disgust with Greece, capital flows within Europe — are moving toward breakup, but if everyone is doing a good job of bluffing that’s exactly what they’d want me to believe. So I guess I don’t really know.

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