Why Europe's plan to end the debt crisis can't & won't work

The most recent European Union (EU) plan is too little, too late and involves too much wishful thinking. Countries like Greece need to restructure their debt to reduce the amount owed — a euphemism for default. Banks suffering large losses as a result of these debt write-downs need to be stabilised by injecting new capital and ensuring access to funding to avoid insolvency. A firewall needs to be erected to quarantine Spain and Italy as well as, increasingly, Belgium, France and Germany from the further spread of the debt crisis. Steps must be taken to return Europe to sustainable growth as soon as possible.

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