PIIGS Are Coddled
There was a time, not so long ago, when smaller countries with narrow and less stable economies had to pay high interest rates for their debt. This higher financing floor forced their governments to be more prudent and conservative. If free markets are anything, they are strict disciplinarians in this regard.
Then the euro happened.
Now, PIIGS and periphery nations—coddled to the point of being spoiled on the coattails of low interest rates due to association with Germany and the like—can’t survive unless they can garner a super-developed nation interest rate. Said differently, the euro coddled these nations into losing fiscal discipline and assuming they could finance themselves long-term like Germany.
This was always a fantasy—and one of the inherent problems with linking monetary policy but not fiscal policy.