Anatole Kaletsky calls for fiscal federalism to save the single currency in his Times column.
There are only two ways that Greece can recover: leave the eurozone, or the EU absorbs half its debt burden. He sees the latter as more likely, but this would mean collective responsibility for around €500bn of Greek, Portuguese and Irish debt.
An institution fulfilling the role of EU finance ministry would be necessary to manage this, but both creditor and debtor nations are politically opposed to more exposure and loss of sovereignty. Thus a continuous threat of crisis is necessary for financial stability. It is only the fear of imminent collapse and default that galvanises Germany into action.
Not for the first time, he notes that default can work: Iceland improved its credit rating and regained access to bond markets. The question is whether Greece, Ireland or Portugal may be tempted to try their luck as well.
Anatole Kaletsky is a commentator on financial affairs, author of Capitalism 4.0 and former Economics Editor at the Times.