> The currency is never the problem ... Not being able to devalue your currency prevents external trade.

So it is the currency that is the problem :-)

Latvia has exports, including to France and Germany, that means that there are goods that are on par or better. Devaluation does not solve anything long-term. What solves things is investment in high-added-value manufacturing and knowledge-based services. Or as you call those investments "buying dept". There is no point for France and Germany to "buy [our] debts" if there is no expectation on our ability to repay those debts, likely from the new production.

Which is what is happening to Greece: It's cheaper to import fish to the epic Island of Ithaca, than to actually fish it!!!

Welcome to technological progress. Of course it's cheaper to do bulk fishing than small scale fishing with no support infrastructure....

Yeah, but the taste sucks.

You are confounding several things. It is NEVER cheaper to import than to fish, because importing costs money and fishing does not. What you mean is that the opportunity cost of fishing is higher than its market value, meaning that there is another job that you can do for 8 hours that would make you more money than the fish that you could have caught in 8 hours would be worth. For that to be true, you need that job to exist that you can do, which is not always true in high unemployment situations. And when that IS true, then it is a good thing, because that means that the economy as a whole is working more efficiently - you are not spending your time doing useless things, you do something more productive instead.