The notion that a country like Greece needs a different currency or fiscal policy to Germany isn't really true. Ultimately whether they print New Drachma and hyperinflate themselves into poverty or whether they accept massive pay cuts/import drops doesn't make much difference - they are two roads that lead to the same outcome.
Greece could become competitive without leaving the Euro. However, it means actually telling people they're going to receive large and frequent pay cuts. As nobody likes doing that, easier to ignore the problem until the whole thing comes crashing down. Then when salaries are redenominated in ND and suddenly ND becomes worthless, it's not the bosses fault see - the boss didn't cut anyone's pay. It's just the darn currencies fault.
Psychological tricks aren't what Greece needs right now though.
On a zero-based forecast the two are equivalent. It is different though to keep your stocks high while taking your flows down as if you keep a euro balance sheet and a de-valued euro p&l. They are two roads in the same direction but with totally different outcomes.
Devaluation actual has real, not psychological impacts in debt repayment and import/export.
Whether printing more money would lead to a liquidity trap is above my pay grade, but empirically (the past 5 years, and every single austerity program in history), imposing austerity has been to shown, to not work, and it's a precondition if they want to keep using Euros. Based on current/future loan terms, Greece will never be able to grow their GDP to meet their repayment schedule.
Greece could become competitive without leaving the Euro. However, it means actually telling people they're going to receive large and frequent pay cuts. As nobody likes doing that, easier to ignore the problem until the whole thing comes crashing down. Then when salaries are redenominated in ND and suddenly ND becomes worthless, it's not the bosses fault see - the boss didn't cut anyone's pay. It's just the darn currencies fault.
Psychological tricks aren't what Greece needs right now though.