From “A Tempting Rationale For Leaving the Euro,” Eduardo Porter, NYT:
“Europe would be in much better shape if the euro didn’t exist and each member country had its own currency. Monetary union has shackled together nations with vastly different economies, depriving them of an independent monetary policy that can help them through rough times. The interest rate and exchange rate that serve Germany also have to serve Spain, though that country has more than four times Germany’s joblessness.
“The euro fed the illusion that Greece, Spain and Italy were as creditworthy as Germany or the Netherlands, propelling a decade-long credit boom in Europe’s less-developed periphery. And it was spectacularly ill-designed to deal with the shock when capital flows to those nations suddenly stopped. Weak countries not only had to rely on their own devices; they had to do so without a currency or a monetary policy of their own to absorb the blow.
“Greece probably couldn’t be surgically excised [from the euro zone]. Once investors realized that countries could leave the euro, interest rates would soar on the next most likely candidates. There would be a huge capital flight out of peripheral countries into Germany, as savers tried to protect their euros from potential devaluation.”