It's institutional. Noah Millman spells it out:
It would be bizarre for Europe’s leaders, faced with an unequivocal and profound design failure of their existing institutional arrangements, to punt on structural questions and simply have the ECB step in to bail out the periphery. Looser money is exactly what Europe’s central government should be delivering. But Europe doesn’t have a central government. It only has a central bank. The ECB is criticized for behaving as if it were the Bundesbank, making monetary policy based on German conditions alone. I fail to see how the situation is improved if the ECB were to behave as if it were Banca d’Italia. The ECB needs to be the central bank of Europe. To be that, there needs to be a European government. That’s what this crisis is about – not about morals and not about monetary policy, but about institutions.
But since a democratic European government is an impossibility – because of the sheer linguistic, cultural, national diversity of European life – we are where we are. The euro was a fatal over-reach for this utopian project, just as occupation of the West Bank was a fatal over-reach for the utopian project of Zionism. And yet the forces behind both European integration and Greater Israel are so great that the follies may well just deepen, until, well, until they cannot any longer, and Europe and Israel have to choose between democracy and utopianism. I hope both pick democracy.