[Someone]

I think they fully realized the problem, but did not think it's consequences through enough; there were (and are) fairly stringent rules for entry to the euro zone (http://en.wikipedia.org/wiki/Euro_convergence_criteria), but were lax in enforcing those rules. There are several reasons for that. Let's say the economy of X is down because it is inherently weak. Do you fine them because of it? Do you think that would help their economy? Also, if half the economies are breaking the rules, how are you going to get a majority in the EU parliament for bringing those fines?