Surely the switch can't happen within weeks?! Besides, what would those countries have to gain from such a switch?
Why can't it happen overnight? A government wouldn't want to announce it in advance, as that would lead to everyone withdrawing their money from the country and keeping it in (relatively safe) Euro, rather than the chosen local currentcy.
It is quite hard to do. The bank clearing systems for each country have been replaced by centralized euro ones for example. And no one will want to convert their money. There are stories that the Greeks have been withdrawing cash and putting it in safe deposits for months.
If you can print your own currency you'll be able to pay EUR-debt if you tolerate the spiked exchange rates and the hyperinflation that comes with them (see also http://en.wikipedia.org/wiki/Hyperinflation ).
I am constantly amazed that printing more money, thereby devaluing the currency and causing hyperinflation, is even considered as a viable option.
Does anybody read history? Is there any good example in the past of this actually working out well? I can only think of disasters when this was tried (usually by desperate politicians) in the past.
Controlled devaluation has worked fairly well for Greece in the past, when it had its own currency. Several times in its history it's used one-time 15-20% devaluations, which didn't spark hyperinflation. The main purpose of them was to: 1) reduce outstanding debt in real terms by in effect soft-defaulting; and 2) increase competitiveness by cutting domestic wages in real terms, without having to cut nominal wages, which are extremely sticky.
Greece is currently at least suffering from the inability to do #2: it would be ideal for Greece for the Eurozone to be running higher inflation rates, which, if nominal pay was held constant (as it currently has to be under their agreements), would in effect cut the pay of Greek employees (and their pensions) without having to cut it in nominal terms, as well as bring down the real prices of all sorts of other things like housing. The only alternative way of accomplishing that is significant, sustained domestic deflation in the form of actual nominal price/wage cuts, which is more difficult to pull off in a way that doesn't completely wreck the economy.
Disintegration refers to the process of removing the construct that is the euro and allowing all (or some weak) European countries to print their own money.
The problem with the Euro comes from the fact that all countries are locked in to the euro and that some countries (those with lots of debt) would benefit from the inflation that would be caused by printing Euros and some countries who saved money (Germany) would loose if inflation was prevalent.
The quickest way to understand the Euro crisis is to understand the concept of inflation and what it will do to each country.
*Alternative solutions that were proposed weeks ago include germany lending to greece or all of europe lending to weaker countries, but those loans required the countries borrowing to adopt tighter monetary policy.
That tighter monetary policy caused riots in greece because they didn't want to loose their entitlements.
The problem is escalating and will likely result in the fall of the European union.
That's what I wondered - surely the value of the Euro would shoot up if the PIIGS left. However, this might cause problems for huge exporters like Germany.
A country doesn't have to continue using the Euro. It would be... painful were they to switch, but it's by no means impossible.