In today's Washington Post, columnist Anne Applebaum has a nicely succinct (and depressing) summary of the ongoing Euro zone crack-up:
Though no one recognized it at the time, joining the euro was like adopting the gold standard: It meant that individual governments couldn't inflate their way out of trouble anymore nor pass on to the next generation the bill for today's expenditures — as they still can in the United States and Britain. All along, it has been a mistake to describe the euro zone's difficulties as a "currency crisis." In fact, it's a political crisis, caused by an addiction to debt, and it requires a political solution. Electorates have learned the truth: They are bankrupt. Whatever decisions the European Union now makes, future recovery depends on how much of the plain facts ordinary people can bear to absorb.
And what are the "plain facts" that Europeans must understand:
Europeans are being forced to face up to decades' worth of fundamentally dishonest politics. Since the 1970s, one government after the next has spent, borrowed and then inflated its way out of the subsequent debt. Then they recovered — only to spend, borrow and inflate once again…
Now they can't.