Why is insolvency not an option for a country? It was in Sweden, which is doing fine now, and in Argentina more recently. Oh look, there's a whole lot more of them[1]. It only isn't an option for a member state of the EU. I sure don't see how Germany's strategy of starving those already struggling economies to death is going to work out.
[1] http://en.wikipedia.org/wiki/Sovereign_default#List_of_sover...