the difference being that the whole "monetary union without fiscal union" experiment is madness and obviously doomed from the start. It's got all the downside

the difference being that the whole "monetary union without fiscal union" experiment is madness and obviously doomed from the start. It's got all the downsides of the gold standard, combined with all the downsides of a fiat currency, with the advantages of neither. A big advantage of having a fiat currency is that through manipulating the money supply, a country can essentially give everyone paid in that currency a pay cut (or a raise) relative to other countries. This situation where Greece is dramatically less productive than the rest of Europe is a textbook example of when currency devaluation is appropriate... but they can't do it, because they are using the same currency as Germany and other countries that have very high productivity levels. Greece is way better off outside of the euro; loaning them more money at this point would be delaying necessary pain; and certainly, getting off the euro and bootstrapping their own currency will be painful, but... it's something they are going to have to do.