There's a simple solution to Greece's problems, but Europe won't try it
http://www.vox.com/2015/6/29/8863313/theres-a-simple-solution-to-greeces-problems-but-europe-wont-try-it
Ezra Klein: Imagine I haven’t been following this at all. What’s the simplest explanation for why the world is so concerned about Greece today?
Adam Posen: The simplest explanation is that for the euro to remain together, and therefore to remain a stable currency, you have to believe the membership pays their debts. Right now, the Greeks are not going to pay back what they owe the rest of Europe. Right now, there literally aren’t enough euros in the Greek financial system, public and private, to pay back what they owe.
So Greece will have to issue IOUs to their creditors and their businesses. And that will mean you have a currency in Greece that is not the euro. It will be a kind of scrip. And so the Greek people have been pulling their money out of the Greek financial system because they don’t believe this scrip will be worth as much as the euro.
The way we deal with this kind of problem in the US is we have fiscal transfers. Mississippi and Alabama never really pay back what they owe California and New York, and that's okay. So you can see the crisis in Greece two ways: you can believe it’s a failure because the Greeks are reneging on their debts or because Germany is not treating Greece like the US treats Mississippi, as a state they have to look after.