Agreed, but unless you regard recurring and unpredictable crises and defaults as a solution, the only way for European elites to even come to grips with the notion that the Euro has systemic problems which require systemic solutions is to start the debate on what is required to prevent them.

If I get the time, I might write a diary on what any new Treaty should look like including elements such as:

1. A euro wide legal framework for bank restructuring in the event of failure to abide by Basel III capitalisation requirements - specifically ruling out taxpayers as guarantors of last resort - and providing for a harmonised hierarchy of risk sharing amongst investors..

2. Fiscal harmonisation between member states

3. Policies and institutions specifically designed to combat structural/regional - e.g. trade - imbalances

4. Eurobonds

5. Bank regulation

6. full employment and productivity/income equalisation

7. Asset and consumer price inflation control

8. Tobin tax to disincentivise speculators and other incentives to volatility/gaming the system

9. Dismemberment of TBTF banks

10. Social harmonisation (health/education/social welfare) between member states

And no, I don't expect the above to be passed or even proposed any time soon... but that is no reason why we shouldn't start the debate...

Index of Frank's Diaries