It's been rather blatant for the last months and years that some EZ countries aren't in their best economical shape. Greece is probably doing worst and in fact the despair is getting extremely serious as news come from there that parents are leaving their children for the simple fact that they cannot support them and pharmacies' stocks are getting seriously low. It is beyond any discussion that if those kinds of stories are true the management of the crisis is running in the wrong direction.
Austerity in Greece hasn't done anything for its economic shape. Most people, at least outside of Brussels, now accept the fact that Greece has to leave the EZ, devalue the new drachma and get money into the economy instead of "saving itself out of recession".
But the problem is the threat of disordered default on Euro denominated debt and contagion on other EZ economies. Due to this, the ECB and people that are uberfrightened of inflation don't even want to think about Greece's exit from the Euro nor quantitative easing in the form of ECB buying government bonds, in the hope of getting the interest rates back to human levels from heights that not even the Greek gods could pay. The holders of Greek bonds aren't too eager either, many of them on the edge of bankruptcy themselves.
The repetition of history
This has all happened before. In the early 1930s, the "gold bloc" was fighting to maintain gold's status as an international currency. But the UK and US wanted to revive their economies and get long term interest rates down and so, they devalued their currencies in terms of how much gold one sterling / dollar could buy. The gold bloc strengthened their ties but it didn't work simply because the citizens of the gold bloc countries revolted or demanded serious improvements. Czechoslovakia left the gold standard in 1934. Others slowly followed suit.
A major player left the gold bloc in 1936. That was France. She managed to do it with the assistance of UK and US that agreed on defending the French franc from any "unnecessary" movements.
Essentially, this is exactly what Greece needs today. The economy is in shatters, just as the economies of the gold bloc countries in the 1930s, and its only getting worse. Greece has to leave the Euro, nobody in his right mind claims that she can "austeritise" herself out of recession. The only problem is how to perform the exit in a rather calm fashion.
Greece should copy 1936's France. If Greece stays in the gold bloc - the Eurozone - we can forget that the economy of Greece is going to revive itself. In order to stop speculation from going on a rampage, the US Fed and Bank of England, along with central banks of Japan and Switzerland, must assist the ECB on maintaining the interest rate levels of other EZ countries at the low and at the same time keep the currencies in question within reasonable levels of fluctuation.
That way, countries that need to leave the EZ can do it without risking getting hammered by speculation or infecting other economies with speculation flows. Greece would be followed by Italy, Portugal, Spain and Ireland. Their new currencies could, and should, be set on an adjustable peg with the Euro with wide fluctuation bands that would not only be defended by the ECB but the Fed and Bank of England as well. This would be a mini-version of Bretton Woods.
Obviously, I'm not the dreamer to think this will happen, at least not yet. No political leader in Brussels, with any serious powers, is courageous enough to face the situation as it really is and simply tell the truth: some EZ countries must be allowed to exit the EZ with international assistance and the chance of joining the currency zone again in later time if they so wish. But if we continue on this mad path of austerity the only thing that will happen is that social revolts will take power, whether we like it or not.
What is most frightening however is that it took France seven years to exit their gold bloc trap back in 1930s. Hopefully, Greece doesn't have to wait three more years.