system
Given the following post, respond as if you're commenting on Reddit:
human
Whats going on with the euro??
gpt
The Euro is a shared currency. Basically, a bunch of countries all use the Euro as their currency. This means that when these countries borrow money, they borrow Euros, and repay it in Euros. Now, a bit about the value of money - it's all based on how much there is in the market, and how much people want that money. The more Euros are out there, the less each one is worth, and the fewer people want Euros, the less each Euro is worth.

So, Greece, Italy, Portugal, Spain and Ireland have all borrowed heavily (in Euros). Way too heavily, by all appearances, and it looks like they'll be unable to save themselves from bankruptcy. Now, when this happens normally, the country just prints a ton of its currency, and pays the loans with that. Your currency value drops because there are so many of them out there now, but you survive without having to refuse to pay anyone back. That means you are marginally better to borrow from than if you had just let the loans default, so you can maybe get credit again if you institute the right policies.

The thing is, Greece et al. don't control how many Euros there are in the market. The European Central Bank does, and they don't want to make new Euros, for a bunch of reasons outside the scope of this question. So if Greece is going to pay its loans, it has to look to actual taxed Euros, not Euros it can create out of thin air. 

This leaves Greece with a few options, when it can't pay: first, it could just not pay, in which case, they're totally screwed, financially. Banks stop lending to them, nobody wants to do business with the government, and other European nations' banks (who lent Greece all that money to begin with) get totaled by the losses. Second, they could get the money from someone else - this is the idea with getting France and Germany to give them a bailout. They pay their debts, but accept restrictions on spending in return, sorta like how you might have to turn over your spending to your mom if she just paid off all your credit cards. Third, they could leave the Euro, return to the drachma (their pre-Euro currency) and pay all their debts back in drachma, which will be basically worthless. This isn't much better than the first option, *but* it allows them the print-money option if they ever find themselves unable to repay loans they get later.

If Greece leaves the Euro, it means a bunch of things: first, all those people who were lending to Spain, Portugal, Ireland, and Italy are suddenly terrified that *they* are going to make their own (worthless) currency to pay their debts, so they stop buying. Spain and Co. grind to a halt when they can no longer pay their debts. Meanwhile, the value of the Euro drops precipitously, because nobody wants to get Euros to loan to Spain and Co., and there's suddenly a whole country's worth of Euro-spenders gone from the market (Greece). This is bad for Germany and France and the other, more stable Euro partners, because they rely on a strong currency for buying power.