[KarlInOhio]

They want the lira back so they can immediately devalue it to silently default on part of the debt like they used to be able to do. Using the Deutsche euromark puts a crimp in those plans.

[zeestephen]

Re: “They want the lira back so they can immediately devalue it.”

I disagree.

As far as I can see, not one country in the Euro Zone has seriously contemplated leaving the Euro.

There is some populist and Hard Left opposition to the Euro, but beyond that, I'm not aware of any major political party in a “poor” or “distressed” country that wants out.

I think the strongest opposition to the Euro comes from taxpayers in the wealthy European countries who have been asked to “guarantee” the sovereign debt of Portugal, Ireland, Italy, Greece, Spain, and Cyprus.

In my opinion, the Euro would continue to function just fine even if some of those countries did default, although the wealthy countries would need to bail out their own domestic banks that held large amounts of PIIGS sovereign debt.

And one very good thing would happen after a default.....

Interest rates on sovereign PIIGS debt would be re-priced to reflect the real world risk.