We know why Europe will not grasp the nettle. Chancellor Angela Merkel has sworn to the Bundestag that EMU bail-outs will never cost German taxpayers a single cent, and similar sagas are playing out in Holland and Finland.

A debt write-off would be an admission that it costs real money to hold the eurozone together. It would require parliamentary votes heading into the coming electoral Annus Horibilis of 2017.

So Greece gets dribs and drabs in the form of lower interest payments. But as the IMF makes clear, the country will still be bankrupt at the end of its Troika programme. It is stuck in semi-permanent infeudation.

The original sin of the Greek rescues was to convert debt owed to banks and private investors into debt owed to the taxpayers of other EMU states, some of them poorer than Greece, or running even bigger primary surpluses.

How do you explain to the peoples of the Baltic states or Slovakia that they should give debt relief to the Greeks? The politics of this have become infernal. So the path of least resistance is for everybody to lie and pretend that the Greek bail-out is workable.

For tactical reasons, the Leftist Syriza government chooses to go along with much of this deception, knowing that it is essentially broken as a political movement and entirely at the mercy of the Eurogroup Working Group.

Alexis Tsipras threw in his lot with this conspiracy in July 2015 after he took his country to brink, and then capitulated. His game now is to lash out at the IMF over austerity, when he knows perfectly well that he signed an EU Memorandum last year that stipulates a primary surplus of 3.5pc. 

"They're being disingenuous. I know because the Troika tried to shove this Memorandum down my throat, and the whole idea of such a surplus is preposterous," said Yanis Varoufakis, the former finance minister.

Syriza's real dispute with the IMF is over market reform. Mr Tsipras clings to 'Old Labour' job laws and a bloated pension system, even though that means slashing investment and cutting so deep into discretionary spending that public buses have run out of spare parts and hospitals have run out of syringes.

As for the IMF, it is fighting for its own survival. It allowed itself to be dragged into multiple rescues of a rich currency union that had ample means to sort out its affairs but refused to use them.

This fiasco consumed 80pc of the Fund's total lending between 2011 and 2014. It was unprecedented in scale and character, and infuriated China, India, and Latin America.

There is no longer any tolerance on the IMF board for further squalid fudges over Greece, and it is almost unthinkable for the Fund to take part in the latest €86 bail-out under the current EU terms.

The election of Donald Trump has clinched it. "We have enough problems; let Germany handle it. It's peanuts for Germany,” he said when asked what he would do about the country.

"Frankly, Putin probably comes in to save the day, if Germany doesn’t,” he added, for good measure.

If only Greece had defaulted and left the euro in May 2010 when the crisis first detonated, and had been able to do so without bringing down the temple on everybody's heads.

The country would have suffered a short sharp shock like Argentina when it broke the dollar peg, with temporary capital controls and a temporary nationalisation of banks. The chances are that it would now be four years into a blistering 'V-shaped' recovery with a super-competitive drachma.

Actually, it is still not too late for liberation, and next time nobody will stop them.

David Fuller's view

Perhaps I lack imagination but I do not see how the EU could survive in its present form, let alone resume its political agenda.  If so, some may regard this as a tragedy.  However, I believe many individuals on the Continent would regard a breakup of the EU with relief. 

What are the prospects for investors? 

The extent of the EU breakup remains to be seen, not least because it will be based on political decisions, often by people who have at least some responsibility for the current problems. 

The least chaotic initial step, I believe, would be for Germany to withdraw from the Euro.  Many Germans might agree for emotional reasons but I think German business people would be alarmed, because a newly floated Deutsche Mark would immediately jump by at least 10% against the Euro, and it could easily rise to a premium of more than 20% over the medium term.  I assume that there is minimal chance of this happening before Germany’s federal election, which will occur between 27 August and 22 October 2017. 

Meanwhile, it would not be surprising if Italy withdrew from the Euro during 2017, and it would make sense for all Southern European nations to leave the single currency.  Their new currencies would slump, creating the initial conditions for V-shaped economic recoveries. 

While a breakup of the EU would obviously create some uncertainty and market volatility, over the medium to longer term, I believe it would be regarded as the best outcome for Europe in many years.  There would be plenty of bullish opportunities for investors in European shares, once individual countries had reverted to their former currencies. 

 Here is a PDF of AEP’s column.