The problem is that you aren't considering second-order effects. Is it better for Greece to give up the euro and return to the drachma? Quite possibly. Iceland

The problem is that you aren't considering second-order effects. Is it better for Greece to give up the euro and return to the drachma? Quite possibly. Iceland successfully rebooted its economy after the financial crisis (with a lot of pain involved) because it was not tied to the euro. Of course, that required a huge amount of willpower and effort (which Greece has not shown yet). Is it better for the EU and the rest of the world for Greece to give up the euro and return to the drachma? Probably not. Why? Because it sets a precedent for giving up the euro and/or leaving the EU. Greece is a relatively small country, and the upheaval resulting from its financial recalibration could be fairly manageable. If Spain or Italy tries to go down the same road, it is a different story. Take a look: http://www.bbc.com/news/business-15748696 http://www.bbc.com/news/business-15748696 Italy owes France a LOT of money. France owes the UK a lot of money. The UK owes the US and Germany a lot of money. Greece, as you can see, is a drop in the bucket. It's the precedent that's important.