By converting the Euro to a supranational means of settlement underpinned by Euro-National currencies, both devaluation and the Euro's survival may be achieved, albeit at heavy loss to creditors. This would, more than anything, come close to Keynes' vision for the Bancor, and give a localised Bretton Woods for the 21st century.

The cost of credit to the financial system is now higher than it is for industrials. The financial system has become a source of autonomous risk. Why do we need it, then?

Underpinning the Euro crisis is a collection of mismatches, of cultures, institutions, expectations and norms between varied European actors and, critically, debtors and creditors. Europe will not survive without unification to smoothe and manage these differences, but it need not be as painful or depowering as many currently argue. There is a positive, optimistic side to greater union. 

If the purpose of the Euro is to reduce transaction costs within a common market, this can be maintained while internally devaluing within the nation state. Rather than through crude supply side measures, this can be achieved by the introduction of a National Unit of Account. Here's how.

Interview of former Greek Prime Minister George A. Papandreou by Jean-Christophe Nothias, Editor in Chief of The Global Journal. Originally published at  the Global Journal. Cross-posted with thanks.

Both economically and politically the Euro project has been deeply flawed. Enormous debts have been accrued which will never be repaid. The slate must be wiped clean.

The euro crisis needs a collective solution, designed and implemented by both the core and the periphery. It has to be a political solution underpinned by good economic and financial reasoning. What George Soros is telling us is that the latter is by no means guaranteed.