To continue yesterday's metaphor...it looks like the Archduke may survive after all. Merkel and Sarkozy supposedly have the umpteenth deal to save the Euro without making fundamental change and Obama is going to agree to slash spending and not increase taxes after all (the ultimate failure of the Courageous State).
We may get through the next week without financial meltdown.
The fact tat banks are insolvent despite that will however mean that this problem will recur, soon. Liquidity may remain intact for now, and that's advantageous. But the crisis of solvency remains. Only radical action will solve that.
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I wonder if the Euro area could be split in two, with the northern industrial countries remaining in the -shall we say – Northern Euro N€ and other countries with weaker economies opting for the Southern Euro S€.. The exchange rate could be set so that those choosing the S€ could immediately experience a devaluation in order to help them to recover. Would this be too simple?