A Six-Point Plan for Ending the Debt Crisis

by Thomas Straubhaar

Spiegel
August 12, 2011

There seems to be no end in sight for the long-running crisis in the euro zone, and politicians seem to be powerless to prevent the further erosion of the monetary union. But there are a number of practical steps that would mitigate the crisis -- and help prevent the next one.

As the saying goes, extraordinary times call for extraordinary measures. The financial markets are highly nervous, and people are losing their faith that politicians can do anything to combat the growing debt crisis.

Under these conditions, the most important aim of any measures has to be to halt the snowball effect of recent events and to keep the economic wildfire from crossing over from the financial markets to the real economy. And the only way to do that is by having politicians wrestle back the helm.

What's more, Europe and the United States need to start coordinating their actions as quickly as possible. In the near term, heavily indebted countries must be given the liquidity they need in the form of new loans. In the long term, politicians need to hammer out a credible way to reduce state debt.

To meet these challenges, Europe needs to follow a six-point plan.

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