Euro crisis is an important lesson for the nations and it gives a reason for the people to think on how they can avert such situation. The formation of Euro currency was done with a good purpose and there were things which the European Union wanted to achieve through the Euro crash. However PIIGS nation did not adhere to the rules and they misused the facilities which were available to them through the common currency. Firms in these nations could have used the cheap money to grow further and strengthen themselves instead they chose to spend more and with nations like Germany and France behind them they never though they would face any difficulty in the future. However post the debt crisis these assumptions have been destroyed. With Euro under threat the people of these nations are feeling the pangs of the crisis. With the unemployment at all time high and almost no economic growth there are not much options available. Germany and France are trying to save the Euro currency else these nations would need to break from the euro zone, form their own currency, print more of their currency, devalue it and thereby pay the huge debt. Else it would be very difficult for these nations to catch up to other European nations. Also looking at the current situation it is highly unlikely that these nations will be able to repay their debt. Currently they are repaying the debt by borrowing even more which is not sustainable unless they find a good source of revenue (Bibow, 2012).
Policy makers in Germany and France have taken certain steps to avoid defaults of the nations and preventing them from exiting the Euro, however it remains to be seen till when these nations can fund the other nations.
Thus there was cycle which was created. Germany banks used to lend at a favorable rate, citizens of other nations bough the loans and then they bought goods manufactured by the German companies as they were competitively price. Because of the single currency it was level playing field and the exchange rates did not matter in the pricing of the goods. Since Germany already had the edge in the production its exports went up exponentially. The amount of money which the PIIGS nation has to repay to the banks ran into billions of dollars (Reis, 2013).