Imagine two kids passing a soccer ball back & forth as they slowly walk down a country road. They come over a gentle rise when the road suddenly takes a sharp dip downwards. About half a kilometre ahead though they discover that an earthquake has caused a huge chasm in the road, making it impossible for them to cross.
This is a useful metaphor to envision the terrible economic crisis that Europe is facing in the next few years and possibly even sooner. It's very clear where things are heading but weak-kneed politicians, not wanting to displease the electorate, refuse to do anything serious about it and just keep kicking the ball down the road. Eventually though, there will be no more road ahead.
In this podcast, the BBC's Peter Day colourfully fills in the detail of the situation.
The one suggestion (near the end of the podcast) that instead of the periphery countries leaving the Eurozone, the core countries (Germany, France, Belgium, The Netherlands, Finland) should leave, was a possibility I hadn't really thought about, but it makes a kind of wacky sense — the core countries would be much more able to manage the devolution from the Euro to their own "new" currencies (or perhaps a new common currency — like "new Coke") than if the periphery countries had to do the same thing. If the two currencies were then allowed to float freely against each other, the periphery countries could modify their monetary and fiscal policies more-or-less in lockstep to allow the exchange rate betwixt the two to find its own level.
Hmmmmm, gotta think about that one some more.
It's no different in the USA. There as well is is very clear where things are heading but weak-kneed politicians, not wanting to displease their base, refuse to do anything serious about it and just keep kicking the ball down the road.