Eichengreen and Plan B for the Eurozone

Distance makes the heart grow fonder, but the eyes see clearer.

Economist Barry Eichengreen, of the University of California at Berkeley, has a different view of the Eurozone imbalances, according to an interview published in Der Spiegel.

Some excerpts:
"....Plan A has failed. Now they have to switch to Plan B. They Eurozone  must stop attempting to combat the crisis in Greece and Ireland by forcing these countries to pile more debt onto their existing debts by saddling them with overpriced loans.
...Essentially, all Germany and France want to achieve with these measures is to protect their own banks from collapsing. Now people are beginning to realize that there is no way around rescheduling Greece's debt -- and that will also involve the banks. For this to happen, there is only one solution: Europe needs to strengthen its banks!
 ... As a rough estimate, I'd put the costs for recapitalizing the German and French banks at 3 percent of Franco-German gross domestic product."

 Source:  http://www.spiegel.de/international/world/0,1518,748239,00.html