Two-tier euro would be a paper exercise and won't solve crisis
To paraphrase former US president Bill Clinton, it's the debt, stupid, not the European currency, writes Dr Constantin Gurdgiev
Since its inception, the euro has been embroiled in one financial crisis after another, from the collapse of the exchange rate mechanism in 1992 to the current ongoing sovereign and banks crises.
In between these big events there was a decade of serial mismanagement of the monetary policy and political capture of the currency. The depth and the duration of the current crisis have startled all policymakers within the EU. This should not have been the case were they to pay attention to the realities of European project. You see, Europe has a mosaic of states with a number of different, if often overlapping, problems.
Greece, Portugal and Italy form a group of countries with crony and cosy relations between the state and a number of long-term subsidies-dependent political groups. This has resulted in government spending overstretch. Fiscal and growth crises characterise these states, manifested in very high levels of public indebtedness.