The Euro crisis will likely resolve itself in the peripheral E.U. countries, such as Spain, Italy and Greece, returning to their respective pre-Euro currencies. There are three main reasons this is likely: liquidity, poor chances for centralized fiscal control by the European Central Bank (ECB), and inflation.
Besides default, the only other options for these countries are for the ECB to print out more money, which would only address the short-term issues of liquidity. The ECB buys government debt and pays for it by printing currency. The government then gets to buy goods and take income from the bonds the ECB holds. The bond income is distributed proportionately among all EU members according to population and GDP. If any country were to default, all of those losses would similarly be distributed proportionately. Thus if the bonds the ECB buys don't pay off, Germany - the richest and most populous EU country - bears the brunt of said losses. Recently, there has been a shift in proportionality. The ECB has bought the debt of Greece and Italy without printing more money by selling Germany's debt. Small business financing is more difficult for all countries as a result, and if the economy worsens, it will be harder to maintain this disproportionality.
Secondly, the Treaty on the European Union prohibits the ECB from intervening. It can't leverage its power for weaker individual countries and it must take the blame if it does any damage to countries in its duties. There are many other legal issues here, involving a super-majority vote of 10 the 11 small countries for any large decisions.
Moreover, there are strict prohibitions against ECB bailouts, which could easily become endemic, as they did in the U.S. in 2008. Over the past year in the U.S. we have seen inflation rise at a somewhat modest rate. In another five years as a result of quantitative easing, with the recently printed dollars still in circulation and the GDP/debt ratio still over 100%, there could be serious trouble for the markets. If Europe were to do the same in an attempt to bailout its weak countries, there could very well be a flight from the Euro due to inflation. If the ECB does decide to continue buying debt, it will likely do so with the result of imposing stricter control over the fiscal policies of individual European states. If that fails, it will be likely that the peripheral countries abandon the Euro to return to their pre-Euro currencies.
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