On a macro level, that's indeed true, but on a personal level, every Greek saw the price of things double relative to income a decade ago, and they were not able to scale back lifestyles as quickly. Whoever imagined they could does not know much about human nature. Greeks by tradition were not keen on debt, and their high home ownership %s made even mortgages a rarity. I hate to demean my own people but the scenario was a little like giving your child a credit card before going off to college. No Greek government could have withstood the immense pressure of a public workforce concerned with losing tons of buying power so quickly. That was not going to happen.

The problem is that a country with a good social welfare system that also has a first class education and training system may pass by training workers to compete in this highly competitive atmosphere. Greece is not that country. It's lack of diversification is it's problem.

I know this is not going to happen, but if it devalued, Greece would also find that the lack of diversification would be a big boon to the welfare of average citizens. Tourism and Int'l Shipping still make up more than 50% of GDP, and then there's trade in agriculture etc. With the flight of capital from the country, the fourth pillar of the economy (Banking) is about to be brought to its knees) but nonetheless, Greece's three main industries are still competitive and they bring in lots of outside dollars. Unless the shipping owners re-register their ships elsewhere--in an incredible show of cowardice--Greece has the easy means of improving the situation of its citizens. A cheaper tourist destination would help people internally. Transferring shipping dollars into a devalued currency would also help. The problem of course is that you'd totally scare away foreign investment (but if you look at the statistics, foreign investment is abysmally low in Greece) and that you'd lock Greeks inside the country, just as they used to be when Greeks used to go on vacation to Bulgaria.

I'd say that Greece is more like Argentina than it is like Haiti.