A “velvet Grexit” is a trick. Argentina, Ecuador and Iceland prove default can work.

In the midst of Friday’s Bundestag vote to approve a third €86bn (£60bn) bailout deal for Greece, its humiliating and impossible Versailles-style debt repayment terms are igniting increasingly vociferous opposition from several quarters. This peculiar alliance of bedfellows, including the International Monetary Fund, the White House, the European Central Bank as well as taxpayers and campaign groups across Europe warn that the latest austerity plan will categorically fail without substantial debt relief. Yet German Chancellor Angela Merkel and several Eurozone governments stubbornly refuse to entertain such a possibility.

Ironically, it seems to be Thursday’s renewed call from Germany’s Finance Minister Wolfgang Schäuble for Greece’s “temporary” exit from the Eurozone that is rapidly gaining traction as the only compromise solution that can break the impasse by reconciling the disparate interests of all parties. Indeed, advocates argue that the return of the notion of this so-called “velvet Grexit” (first mooted in 2012) to the negotiating table has changed everything by offering the shattered Greek people a way out of their despair and a chance to regain competitiveness at a stroke, whilst also clearing the way for meaningful debt relief.