Those who kept the United Kingdom out of the European monetary union deserve the gratitude of their people.
The UK is running, and is expected to run, much higher levels of debt than Spain. But bondholders are not freaking out about the UK defaulting.
Why not?
As Paul Krugman argues, it is the UK's monetary independence that is saving it from a crisis. The UK is a currency creator with its own central bank. The Bank of England can act as a lender of last resort in a crisis. It need not rely on the permission of Germany or France to avoid a default.
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