Let's say you're Greece and you're a trillion Drachmes in debt. You can't pay the interest anymore, your deficit is too high. Greece uses INFLATION, it's super effective! Prices double, but wages double also. Tax income doubles. What stays the same is the debt, and suddenly Greece can afford to pay its lenders. National crisis averted. Only the lenders are screwed, and those who had their savings in Drachmes. That's also the reason why it's very popular to have savings accounts in "hard" currency in these countries.

That's how it has been for decades, but now with the Euro that's not possible anymore, leading to the Euro crisis.