Lifted from comments, by Cedric Regula, from the post on Stedwegg.
I think I should add some historical context here since the econ news on the problem with the PIIGS is focusing only on “the problem is they can’t depreciate there own currency and make everything better”.
Ten years ago the PIIGS and others were desperate to get into the EU and use the Euro because they had depreciated the hell out of their currencies for decades and were unable to borrow money at reasonable rates anymore, if at all.
The EU architects weren’t as stupid as our brilliant economists make them out to be. They imposed limits on fiscal and trade deficits on EU members. It is a well known fact that a stable currency is good for business, and the idea was to create a larger regional market with a single currency and more common regulations and import duties between members.
Where the problem came in is fiscal and trade deficits rules either weren’t enforced, or like Greece, some countries cooked the books and hid the problem. In the case of Iceland and Ireland, lack of banking regulation made them the safe haven for financial fraud, and this was exploited by some Euro and US banks as well as Irish banks.
So the only good thing about having their own currency is the PIIGS would have gone bankrupt 10 years ago, and maybe would have partially recovered by now. But only maybe. (Some like to point to Argentina as a miracle economy, but really, how many are packing up to move there?)