A New Idea to Save the Common Currency

Could the Euro mess be saved by simply pushing CTRL ALT DELETE, rebooting the Economy and then cushioning the fall? Der Spiegel shares some of Wagenknecht’s left wing ideas.

If there is one thing that has seemed to characterize the euro crisis, it is the lack of alternatives. The common currency bailout fund, for example, had to be vastly enlarged to prevent financial markets from plunging the common currency zone into chaos. Spain had to be given billions in aid to prevent its banks from collapsing and making the situation even worse. The list of instances in which European leaders have made moves they’ve called mandatory is long.

Two concepts are already out there, of course. There is the arch-liberal idea that, simply put, calls for allowing them all — both the troubled banks and the deeply indebted countries — to go broke. The resulting recession, of course, would be painful. But it is the necessary catharsis, proponents of this idea say, following past spending excesses.

Then there is the left-wing strategy, which calls for the immediate introduction of communitized European debt in the form of euro bonds in addition to a Continent-wide banking union. German taxpayers would become the primary backers of European debt, and a euro-zone-wide deposit guarantee would help ensure the stability of banks in the bloc. Other ideas tend to be a mixture of these two approaches.

Full article here.