[soVeryTired]

I think one major point is that a devaluation in the drachma would have made Greek industry more competitive again. Inflation goes up, yes, but imports decrease and exports increase.

Greece would have experienced market discipline instead of discipline by government fiat. The latter is much more dangerous politically, as we saw with the election of Syriza.

I think it's telling to contrast the fate of Greece with the outcome for Iceland.