Making Sense of the Swiss Shock

For years, policymakers have been wondering whether the exit of a small, fiscally weak country like Greece could undermine the euro. Now, policymakers will have to deal with even bigger risks, stemming from the exit of a small, fiscally strong country that is not even a member of the European Union.

PRINCETON – Since the European sovereign-debt crisis erupted in 2009, everyone has wondered what would happen if a country left the eurozone. At first, the debate focused on crisis countries – Greece, or maybe Portugal, Spain, or Italy. Then there was a rather hypothetical discussion of what would happen if strong surplus countries – say, Finland or Germany – left.