Idiosyncratic Shocks are all the buzz when it comes to common currencies, such as the Euro. Everyone benefits in good times when a common currency eliminates transaction costs and facilitates capital flows. 

But when member countries experience adverse economic shocks, or when their growth rates differ dramatically, there is conflict in the Union.  Lagging countries would love to depreciate their currencies to gain a competitive edge (via expenditure switching), but there is no support for this from the leading countries. The laggard faces two unhappy choices: face the cost of leaving the union, or fact the cost of a long and painful adjustment.

Here it is instructive to remember that even the US is nothing other than a union of 50 states that have all agreed to use the dollar. If each state had its own currency, Louisiana could have simply depreciated its currency to export its way out of the Hurricane Katrina recession. But without that option, the state simply had to ride it out, live through the spike in of unemployment and endure falling wages. In the US, there seems to be consensus that such idiosyncratic shocks aren't all that bad — people can move other states to find jobs. Tell that to the Spaniards…