How serious is the euro debt crisis?

Much is being made of the pressure on the euro arising from the sorry state of Greek finances, and of the risk posed by Portugal, Spain, Ireland and even Italy. The interest rate on Greek 10-year Eurobonds is nearly 7%, over twice what the German government is paying to borrow abroad. The recent story in the Financial Times that hedge funds are betting nearly €6bn on further falls in the euro does not bode well for the solidity of the common currency.

Could it be that unless the renew...