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Originally Posted by sneaker
Let me rephrase: how does a currency get destroyed?
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A more accurate saying is a Euro "break up". If big economies like Spain and Italy default and exit from Euro, then eurozone is effectively broken up. It may return to individual currencies. Or it may end up with a smaller common currency among the healthier economies. But the Euro as we know it would be gone.
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If others are the ones putting all their stakes in, giving tips and making demands is easy. I find the idea of an earlier bail-out preventing all this amusing. We now had gigantic bail-outs and ECB interventions, even more of that is coming. The effects were disappointing - as disappointing as an early bail-out would've been. You can't bail-out against these huge deficits, and you can't even prevent them as budgets are sovereign matters.
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When I said rescue packages, I meant bailouts AND austerity measures. Of course bailout money alone is not going to solve the problem. But the overall efforts were too little at the start, and investors remained lacking confidence. If a more complete package was implemented from the start, the market would have stablised much easier. Italy's bond interest would not have risen to an unaffordable level, which triggered more panic and another round of rescue package.