Germany is not willing to suffer along with the country(s) in trouble, and not having monetary sovereignty the troubled country, Greece for example, or Spain, can't devalue (devaluing currency effects foreign exchange, imports & exports, but keeps the relationships within an economy the same, so imported goods cost more but exports compete better) . . so devaluation offers opportunity for a fresh start. but being on the Euro, with currency relationships NOT changeable leaves out that opportunity for correction & a fresh start.
Seems like all those financial monetary geniuses could have seen that coming?
Another key issue I think is that of austerity. Under that prescription, the old (& I hope DYING) paradigm would cut back on domestic spending and raise taxes, so the banks (who are the ones most concerned with foreign exchange rates) wouldn't have to take losses (to me this is feeding the parasite when the host is already dying) --maybe kind of like bloodletting . . . . -at best! A lot of respected economists, including popular ones such as Krugman, are pretty convincing that austerity is EXACTLY the WRONG approach. & they make sense.
People used to say:
1. The money has to come from somewhere, and
2. The money has to be worth something.
I think they got that wrong!!!!
Money has been coming from thin air for a very long time, and has NO actual worth, except the faith of those who need and use it. (& that's how it should be, according to many) If money has that faith, it works. Without that, it doesn't. Being legal tender usually is enough to legitimize and evoke faith, because we really DO need to have money to use (rather than barter, etc.) and all the populace really wants is money that is reliable and not being manipulated to enslave them. Well THERE's the rub, eh?
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