The problems you are describing are different problems. Problems to do with run-away politicians raising aggregate demand beyond the country's productive capaci

The problems you are describing are different problems. Problems to do with run-away politicians raising aggregate demand beyond the country's productive capacity, of states failing to enforce taxes appropriately, and so on. Maybe Greece has some of those problems, but the key problem that Greece is facing right now is created by the fact that they don't have their own currency. Imagine a village with two people, one is a baker by trade and the other is a butcher. Both are unemployed: the butcher does not have money to pay for bread, and therefore the baker does not have an income. Because of this, the baker does not have money to pay for meat, and therefore the butcher does not have an income. Because of this, the butcher does not have money to pay for bread... Of course, the grid lock would be obvious in this simple situation, and the baker and butcher would soon get rid of the old social construct that is money and payment, and create a new social construct, effectively introducing their own currency. The above is very much a simplification, but it describes the gist of the situation that Greece is in: double digit unemployment and youth unemployment around 40% - a staggering inefficiency! - all because of a social construct (money) being handled in an utterly stupid way. If only somebody were to start spending money, the cycle could be broken. If the Greek government were monetarily sovereign, they would be able to fix the situation. Greece would not face inflation as you claim if they reintroduced their own currency. Certainly, that currency would drop significantly in value initially. This affects the cost of imports, and that will in turn affect inflation. But you wouldn't see anything like the free-fall you claim. After all, Greece did okay (not perfectly, but okay) before the Euro as well.