There is some good debate going on over at the DT from Ambrose Evans-Pritchard, who asks if the Germans are ready to give up on the EURO here; and from Daniel Hannan who asks if the EURO will survive here.
The crux of the argument is that the Germans will have to make a financial commitment to prop up the EURO if it is to survive... this is of course not solely an economic argument with the politics and Maastrict laws being big factors.
Go read, all good stuff.
Ultimately, I feel the EU will put politics before the economics or existing treaties and laws. We know this, because this is exactly what it has always done in the past. So in my mind it is more a question of how long the Irish, Portuguese, the Greeks and the Spanish can hold on. To my knowledge none of these national governments is looking seriously at alternatives to the EURO. Italy seems to be making up the new acronym of PIIGS.
I really doubt that Spain, Portugal or Italy will be allowed to default on any debts or succeed from the financial union. I don't know enough about Greece to comment, but there has been public uprisings there so it will not be a straight forward fix. Greece, I feel will be better suited to recovery by taking national decisions, rather than trying to fit in to the EU's decisions. Ireland has friends in the UK and the US, so if they go first the EU might pass the buck to the IMF. I must however confess as I have done so before, don't bet the farm on my economic outlook.
I want to see an end to the EU integrationalism and the EURO crashing has long been the best hope for this; though I really do not want to see allied countries in financial dire straits. I got married in Ireland last year and I am sad to think of how this might affect the fantastic people there.
The UK economy is in trouble, but those of us who fought hard to retain economic independence are being proven right. It was the right decision because the economics were put before politics... let's hope the EU does the same.