Why does Greece affect the euro?

[Nagora]

Putting aside a default, exit, and re-issue of the drachma scenario, the other nightmare scenario that simply won't be allowed is that Greek could default and stay in the Euro. That would kill the currency stone dead as it would mean that the EU was saying that the central banks of Europe would allow a member state to borrow on the markets and have the other countries pick up the tab (or try to). At the very least, a defaulting country HAS to be kicked out of the Euro to show that the central banks are serious about not letting this happen again. Of course, it never should have happened in the first place and the fact that it has has brought the EU to the brink of collapse as a unit and even a default and exit for Greece could tip it over the edge; there's no way the Euro could survive a default and stay-in.

Yeah it's really an issue of a poorly managed system of trust. The collateral should have been investigated more closely before the loans were given out. Generally it sounds like the central banks aren't conservative enough.

Well, it did emerge in the early part of the crisis that the Greek government had actually falsified the countries accounts when the investigations were carried out. For bonus points, they later admitted that the "corrected" figures that they confessed to were in fact also falsified! So, yes, trust is thin on the ground.