By the way, using a common currency does not require that the debts of those using it should be the responsibility of all who are using that currency. California's debts are California's problem and the problem of those who buy its bonds. Other states aren't obligated to bail it out.
The problem is (as much I understood), that when one Euro country is going bankrupt, this will damage the confidence in the currency as such. But I don't fully understand the reasoning, as I said.
It also could be, that it was the "one and only alternative", because some big German banks would have been severely damaged back then (back then, they held a big amount of the Greek debts) ... Today, only the tax payers will be damaged, what is not so bad ...
French and German banks had bough Greek bonds. France and Germany didn't want their banks to default, even though the banks had made these bad investments.
That's the only way a bank will learn to properly weigh benefits versus risks. If they get bailed out whenever a bad risk blows up, they won't learn to avoid or charge rates appropriate to the level of risk.
And depositors should also think twice about where they put their money.
If we want banks that don't default, we should have banks that only issue mortgages for less than 80% of a home's pre-bubble price. Let the buyer or another lender be on the hook for the risky part of the loan.
And if this bank fails, let its assets be turned over to a corporation owned by all the depositors, whose shares they can buy and sell. There's no reason to make the taxpayers pay to recapitalize the bank and keep the unwise bankers in business.
If there's a demand for that level of risk and the low rates it pays, that will solve the problem who want that level of security.
But we want to be insulated from risks and have them spread around to other people when dumb investments blow up. So even wise investors are stuck paying the costs. And we DO eventually have to face these costs despite all the borrowing and money creation we do to paper them over.