Germany and the PIGS

Watching the economic drama of the PIGS — Portugal, Italy, Greece and Spain — keep telling us, reasonably, that you cannot have a Southern European economy and a German exchange rate. They mean that the euro, dominated by mighty and disciplined Germany, has become a straitjacket for deficit-ridden, debt-laden, unproductive economies that cannot devalue their way out of the crisis because they have ceded control over monetary policy to the European Central Bank.
As a resident in Spain it has been painful to watch the Spanish economy collapse with one out of every five adults and four out of 10 young people out of work, millions of mortgaged properties underwater, half of the savings & loan banks in a state of insolvency and a private debt almost twice as large as the size of the total economy, Spain is going through a “Thatcher Crisis” or a “Brown Period”
Spain's shock after realizing that being a member of the European Union entailed worldly costs and sacrifices and a refusal to even consider the possibility of giving up the euro. In a situation in which its domestic currency was free to reflect its deficits, high labour costs and low productivity, Spain's currency would have been naturally devalued by now.
The common currency contributed greatly to Spain's delusional economy by giving it an unrealistic purchasing power and is making tough to overcome the recession by not allowing it to devalue the exchange rate. But the real cause of what is happening is that the nation mistook easy credit, subsidies and social protection for real wealth. If they don't relearn the basics of what it takes to be rich in a competitive world, Germany and a few others will eventually say goodbye to them.