It really bears repeating what a humanitarian catastrophe Greece is enduring. Twenty-five percent of people are unemployed. Youth unemployment is near 50 percent. Hunger among Greek children has risen. And the economy is set to grow a paltry 0.8 percent this year. People will continue to endure immense suffering for years if austerity does not end.
Greek leaders need to do something; anything to make austerity less severe is desirable. If Greece were allowed to run a budget deficit and spend on programs to create jobs and offer relief to the most desperate citizens, then its social crisis would lift. Fiscal stimulus works, and if a country has ever needed it, it's Greece right now. But the terms of Greece's bailout forbid it.
If the Europeans don't relent, leaving the euro may just be the best option left. In the short term, this would be a rough path. Very, very stringent capital controls would be needed to keep banks solvent, and if they weren't enough, an all-out financial crisis would ensue. A lot of wealth would be wiped out as the value of drachma-denominated assets plummeted. There's a chance of dangerous inflation.
But leaving the euro at least provides a path toward an actually growing economy for the country sometime in the next decade. The Greek people would finally have control over their monetary policy, letting them devalue their currency, boost exports, and get back on track.