Most Euro zone countries seem stuck between a rock and a hard place as regards the Euro at present.
Ironically David Cameron having been in a minority of one or was it two (I don't recall whether the Czechs were with him or agin him on this) in opposing the fiscal treaty which as a consequence only has the status of a pact, others are now seeking to renegotiate the pact which risks making the whole thing even more toothless.
As I have in effect blogged before http://maytreesmusings.blogspot.co.uk/2011/12/eu-or-uk.html if the Germans decide not to underwrite the Euro 100% (and who can blame them for not being that altruistic?) the scheme will fall apart. One cannot fairly criticise one whole nation for not wishing to bankroll an expensive Euro scheme which will otherwise only really work if a federated states of Europe is created with a federal bank mirroring that of the USA. Even more so one cannot criticise young Greeks Spaniards French et al, for opposing the years of further austerity and unemployment that the Euro scheme as currently structured is bound to create.
The conundrum for political leaders is that they know that the world does not owe Europe or the weaker Eurozone nations a living yet despite that their citizens are voting with their own pockets and not with that bigger picture, in mind.
If individual Eurozone nations seek to renege on existing debts and decline to accept bail out terms why should even the most philanthropic of banks or countries lend more? If the weaker Euro states cannot borrow more then to avoid penury, they will have to earn the money. In practical terms the ability to earn will depend on the cost of the weaker countries' goods and services, That cost if priced in Euros is simply too high so the next development is obvious...
The vexed point which affects the UK as much as any other nation, is that of ensuring that weaker poorer citizens do not carry a disproportionate part of the burden of national belt tightening that inevitably occurs after a sustained period of spending beyond national means. Underprivileged citizens tend to receive a far greater proportion of their income from the state so unless some counter balancing measures are taken, the poor will suffer far more by state spending being cut back.
Inflation often worsens as a consequence of a currency depreciating. Inflation tends to create a financial burden which falls disproportionately on wealthier citizens. Obviously the more money one has the more one suffers when the worth of money falls. A balance needs to be struck to ensure that inflation does not escalate to become hyper-inflation such as occurred in Zimbabwe a year or two back until that country effectively switched out of their almost worthless national currency to the relatively stable US dollar. The German Reichsmark in the 1920s is the usual example given of how too much inflation hurts everyone not excluding the poor. However in the absence of the EU being a real federation of rich and poor states with the benefit of a central bank with real powers and in the absence of the Germans being even more generous in paying to maintain the Euro than they are being now, the only way of letting the citizens of those countries who are voting to oppose austerity have their way, is for their elected representatives to take back the power to manage their own currencies by letting their worth fall to enable the cost of the countries goods and services to become more attractive to other nations.
Governments could then manage their own situations and currencies with a view to ensuring that the values of the latter fall in at a reasonably measured rate. Such action coupled with a mix of fair incentives and tax to encourage fair work could enable the problems to to tackled without giving the people nothing but years of austerity to anticipate. Falling currency values could also reduce the debt burdens without the need to for nations renege on their commitments to repay their loans.