Why? They should have never been in the Euro. Any econ major knows that you can't have monetary union without either fiscal union or prudent governments.
Check this prescient article from 18 years ago by one of the best macro minds of recent years (Rudi Dornbusch):
He talks about excluding Italy, Portugal, Greece, Spain, etc. So what happened? Standards got relaxed and they accepted e.g. Spain. And then other countries completely falsified their numbers and also got in due to that (Greece).
I don't even know why are they still thinking about keeping Greece in the Euro. They don't even have the internal political capital to make the deep reforms they need (labor mkt reforms, an IRS with bite, retirement at a much older age, etc). It would have been better for everyone on the first place to assume Greece will devalue, and to start planning for that.
They default, have maybe half a year of real pain, and then they get back on their feet albeit with financial autarky.
I totally agree. Prudent governments don't allow banks to lend huge amounts of money to dubious states that are in a bubble. Prudent states don't ask poor people to pay private debt that was made public by corrupt governments.
As for your question. If Greece leaves the Euro then it is the end of the euro zone. When Florida was going to default the federal reserve paid for them. That way people has confidence in the dollar. If when a European country is going to default every body screams and runs people knows that they shouldn't have any confidence.
