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Today, here we stand, essentially at a watershed moment for the euro zone. Moving from the common ECU currency to a single Euro currency while keeping fiscal policies set at national levels has led to macroeconomic divergence across member states - the very thing the euro was supposed to prevent. Sharing the same currency but not the same budget disciplines has led to countries within the EU such as Portugal, Italy, Greece, and Spain to the sobering danger of defaulting on their sovereign debts. As the cloud of the European debt crisis darkens menacingly, markets are as worried as they are hopeful about a solution. A number of possible solutions are being floated to control national debts, avoid contagion of a “Grexit” scenario to peripheral countries, and stimulate growth...
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