There is an established queue of potential exits, led by Greece in the next year or so and followed by Ireland, Portugal and Spain. This would follow the sequence of applicants for bailouts, though Spain has yet to make its approach for eurozone support. That has rather been my own expectation of the outcome, which would take place over several years, but with the possible exception of Ireland, which may have cut its costs enough to stay in.But I have just been looking at a paper by Matthew Lynn at Strategy Economics, which suggests that Spain may leave first. Whether it proves right or wrong it deserves attention. Given the mis-steps that Spain is making in trying to refinance its banks and the sharp jump in yields on long-term Spanish debt, it will probably get it.The thesis runs like this....
