Joining the Euro zone currency was supposed to be a boon for smaller nations. Whatever growth has been spurred seems to be offset by a lack of monetary autonomy.

Iceland showed the advantages of not joining the Euro. When their banks fucked up, they were able to bail out the deposits of their own nationals while letting the banks and their foreign depositors collapse. Basically, the government took the view that other than keeping their own citizens whole, the banking crisis wasn't their problem. A couple years on and they've fully recovered and no austerity was involved.

@1, when you say "their banks", you're mostly talking about a handful of ordinary Joes who decided one day to call themselves "banks" and go shopping in Europe. Michael Lewis describes Icelandic banks of the time as a guy with a cat and a guy with a dog who agree to sell each other their pets for a billion Euros each -- and now they both have a billion Euros!

The people who subsequently got suckered and robbed by them are less thrilled. Not just "rich bankers", either -- millions of ordinary people lost their savings and jobs in the collapse. the Icelanders recovered nicely because they were the ones owing, not the ones owed -- and they were sovereign.

I hear Oxford University lost £60 million. A hundred or so local UK councils lost £1 billion. Yeah, that's mostly just poor people, who gives a fuck.

Malta, like Greece, is currently engaged in robbing German pensioners. The Maltese, like the Greeks, don't much like to work, but they do like to get paid, and are compensated for their public jobs at twice the rate of most Europeans even though they never turn up for their "jobs". Meanwhile, the Maltese who could afford to pay for their government don't pay tax. Again: not the "rich bankers" who are benefitting.

@3 I think these were mostly actual banks, the same large commercial institutions that have been there for decades. They were owned by stockholders. The stockholders were not bailed out. The institutions were allowed to fail. (A couple of their shriveled husks were essentially nationalized and recapitalized by the government, but only after failure.) The Icelandic government did a cost-benefit analysis and decided their limited public funds weren't for the benefit of private shareholder-owned companies. Had they decided otherwise, they'd have decimated their treasury, and as a tiny country, they'd be in crippling austerity, basically forever.

As to whether the government guaranteed depositors' funds, I'm not sure they ever promised to guarantee foreign deposits. If they did, and reneged, well that's bad. But, I don't think they did.

The banks were greedy, gathering offshore funds to buy high-yield instruments in godawful places like the US, with what turned out to be sketchy ratings based on a false analytical premise, and a greed for business on the part of the ratings agencies. Off-shore depositors were greedy, too. The only reason they put their money in Icelandic banks was the yield was twice what they were getting at home.

It's the old TANSTAAFL rule. I'm sorry people got hurt, but if no one ever gets hurt doing greedy and foolish things, no one will ever learn to be prudent.