The countries will be violently liquidated, but the creditor countries will not wake up, preferring to fall back on the comfortable "those lazy southerners really don't know how to govern themselves".

Remember the 1930's: Spain had a civil war in 1936-39 and Europe's liberal democracies sat back, preferring to allow the Axis powers and the Soviets to battle it out in a proxy war. Not even the invasion of Poland by Germany got France and Britain to wake up (see the phoney war). It took the invasion of Belgium to get France to wake up, and then it was too late.

France only abandoned the Gold Standard in 1937, whereas Britain had done so in 1931 and the US in 1933.

Conclusion: the ECB will not accept debt monetization unless and until Germany itself is in depression. Currently it's in a very mild recession.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS