What ails the EU?

1. Poor countries can't compete using a strong currency.

This goes for Greece especially, but also for Ireland, Bulgaria and Slovenija. These countries could compete if they were able to devalue their currencies which would stimulate export and tourism. Using the Euro they can not.

2. Banks carry too much debt, especially bad debt. The EU has attempted to rescue them with disastrerous results. Greek bonds have been destroyed and some investors had to take a haircut. Who? Well, a couple of banks on Cypress, which made them insolvent. So, the Cypriot banks were rescued by more bailout AND BY RIPPING OFF large depositors. Large depositors (more than 100K Euros) were given stock in the bank and their remaining deposits are frozen indefinitely.

The Dutch Finance Minister blurted out that Cyprus will be a model for other banks and he had to walk back his comments. As it turns out, the EU authorities are discussing just that proposal:

http://www.ft.com/intl/cms/s/0/901823ae-ba87-11e2-b7c3-00144feab7de.html#axzz2THWtfGcR