Seceding to revalue is easier: It has been our long-standing view that such a break-up scenario - where a country or a group of countries want to leave to introduce a stronger currency - is more likely than a scenario where a country wants to leave to devalue. The reason is that the costs of leaving to devalue are extremely high.

First, borrowing costs for the seceding country would likely rise significantly as investors will demand a currency and inflation risk premium.

Second, while contracts between parties in the seceding country could by law simply be redenominated in the new currency, redenomination would not easily apply to cross-border contracts. Foreign creditors would still demand to be repaid in euros ('continuity of contract'). Thus, a country that secedes and devalues would still have to honour its foreign-held debt in euros and would thus face a rising debt burden. If it decided to default instead, it would, at least for some time, be totally shut off from foreign financing.

Third, a country that decided to leave the euro to devalue would immediately face a bank run by domestic depositors who would want to shift their funds into banks in other euro area member countries. This would provoke a financial meltdown which could only be prevented by a freezing of bank deposits and the imposition of strict capital controls.

By contrast, none of these costs would apply for a country that wanted to secede in order to revalue. Its borrowing costs would likely fall rather than rise as it would attract an inflow of funds.

Eoin Treacy's view There are certainly difficulties with the current structure of the Eurozone where there is no coordination of fiscal policy to match the common monetary policy. The next few days will give greater detail of what the Greek bailout package will look like but there are no binding rules which can compel a sovereign state to tighten fiscal policy if it lacks the political will; raising the prospect that the Greek bailout may be the thin end of the bailout wedge.

The prospect of economically strong, surplus countries such as Germany leaving the Eurozone does not appear realistic at today's levels because the resulting currency strength would choke off recovery potential for the respective countries' exporters and contribute to a widespread loss of competitiveness, not least against predominantly weaker southern European economies.

I believe the only way such an outcome could occur is if the Euro were to weaken considerably from here, to a level well below the 2000 low against the US Dollar. At such a level, the international community would probably be quite vocal for something to be done to strengthen the currency. The only other scenario that seems remotely possible is the accession of a far right party to power in Berlin and in today's climate this seems near impossible.

A long-term chart of the Deutsche Mark spot rate suggests the Dollar is firming in the region of its historic lows and a sustained move below DEM1.3 would be required to question scope for further higher to lateral ranging. Against the US Dollar, the Euro equivalent would be $1.50.