Only one silver bullet can solve Europe's crisis
Brian Cowen was actually right -- this is not just an Irish crisis.
As bond yields surge all over Europe and previously 'safe' countries like Belgium and whisper it, even France, are hit with higher borrowing costs, it is time for Europe to be radical or redundant.
While there is no political or economic consensus for it yet and it will enrage Germany taxpayers (again), the best way to save the eurozone is to sanction the creation of a eurobond.
Eurozone countries will simply have to pool their bond issuance and create a so-called 'blue bond'. The idea, around since the inception of the euro, is the ultimate manifestion of if we all stand together, we all must borrow together.
Yes it means higher borrowing costs for core countries and lower costs for peripherals, but at least it delivers a large, safe liquid market on a par with the US Treasury market.
The current problems stem from the fact that bond purchasers prefer to cherrypick the European bond market, buying bonds and shunning Irish or Spanish debt.
The current system means that when severe risk aversion breaks out over say Ireland's budget deficit, it causes people not only to dump Irish bonds, but also Belgian or Spanish bonds.
Think of it in US terms, just because the state of Nebraska might be having a budget deficit problem, doesn't cause anyone to stop buying US Treasury bonds.
The way to create a similar level of stability in Europe (and squash the short sellers) is for a common European issuance programme, at least for some portion of debt each year. ECB president Jean Claude Trichet has already admitted such an idea is one of the potential responses being discussed across Europe. It is time for discussion to become implementation.