Its still a huge risk for the lender, lender could face jailtime if caught financing drug smuggling.

Besides fiat-debt-based-currency, there is a simple explanation for the mess.

One currency, one central bank, but multiple countries with their own fiscal policies and debt issuance. In essence, the country that borrows the most, takes the most advantage of the system (until it breaks......).

Perfectly described by Philipp Bagus in his little book ( http://mises.org/books/bagus_tragedy_of_euro.pdf ) and forewarned by Friedman ( http://super-economy.blogspot.nl/2011/11/again-with-krugman.html ).