How has Greece's so-called profligacy become a threat to the euro? How is this even possible?

The stupid moralistic framing employed by Merkel, the Commission, the ECB and the IMF, that only serves the interests of the very wealthy has proved a boomerang and hit them all in the head, addling their brains even further.

Even today the ECB does not seem to recognize this problem. As a result, its strategy has been to wait and see. Thus, last year it waited until the sovereign debt crisis had sufficiently damaged the banking system and risked leading to an implosion. Close to the precipice, it decided to act and to provide massive amounts of liquidity to banks that were a multiple of what would have been necessary had the ECB acted earlier. Today as the Eurozone is hanging over the precipice again, the ECB again is sitting on the sidelines and waits for worse to come.

...

The European Commission has shown an equal capacity of mismanaging the crisis. Pushed by the creditor nations and the panicky financial markets, it is forcing Eurozone countries to accelerate austerity measures in the midst of a recession.  As a result, the debt to GDP ratios increase as the denominator in this ratio is shrinking faster than the numerator. Countries end up with a higher debt burden, which triggers more panic reactions in the markets.

Again there is a failure to understand what is going on. The excess debt accumulation in the South is matched by an excess accumulation of claims in the North. The correct response would be to force the deficit countries to reduce and the surplus countries to increase spending. The European Commission's strategy, however, forces all the adjustment on the deficit countries without imposing a symmetric and opposite adjustment on the surplus countries. As a result, the Eurozone is forced into a deflationary straitjacket.