One key reason not to leave the eurozone is that it will destroy your domestic banking system. But if depositors start to think your country may leave the eurozone then they'll start withdrawing money from your banks en masse and your domestic banking system will be destroyed anyway. So if your domestic banks are doomed, it's actually better to get ahead of the curve so you can leave and start imposing capital controls ASAP.
This, incidentally, is why any "firewall" strategy is going to be hard to implement. If you're Portugese and Greece leaves the euro, isn't your next move going to be to close out your local bank account to either hold cash euros or shift the funds into a German bank?
TODAY IN SLATE
Here’s Where We Stand With Ebola
Even experienced international disaster responders are shocked at how bad it’s gotten.
Why Are Lighter-Skinned Latinos and Asians More Likely to Vote Republican?
A Woman Who Escaped the Extreme Babymaking Christian Fundamentalism of Quiverfull
Subprime Loans Are Back
And believe it or not, that’s a good thing.
It Is Very Stupid to Compare Hope Solo to Ray Rice
In Defense of HR
Startups and small businesses shouldn’t skip over a human resources department.