Economist: Europe's currency crisis How to save the euro

It requires urgent action on a huge scale. Unless Germany rises to the challenge, disaster looms

“So grave, so menacing, so unstoppable has the euro crisis become that even rescue talk only fuels ever-rising panic. Investors have sniffed out that Europes leaders seem unwilling ever to do enough. Yet unless politicians act fast to persuade the world that their desire to preserve the euro is greater than the markets ability to bet against it, the single currency faces ruin. As credit lines gum up and outsiders plead for action, it is not just the euro that is at risk, but the future of the European Union and the health of the world economy…A rescue must do four things fast. First, it must make clear which of Europes governments are deemed illiquid and which are insolvent, giving unlimited backing to the solvent governments but restructuring the debt of those that can never repay it. Second, it has to shore up Europes banks to ensure they can withstand a sovereign default. Third, it needs to shift the euro zones macroeconomic policy from its obsession with budget-cutting towards an agenda for growth. And finally, it must start the process of designing a new system to stop such a mess ever being created again.”

Economist: Europe's currency crisis How to save the euro

Thank you!