So, what needs to be done? First, eurozone banks have to be recapitalized.

Losses that eurozone banks would suffer would be manageable if the banks were properly and aggressively recapitalized.

By contrast, eurozone banks have almost stood still on both indicators.

Eurozone banks became among the world s most over leveraged and the worst affected by the crash of 2008.

But, since the onset of the global financial crisis, eurozone based banks subsidiaries in emerging Europe have been reducing their exposure to the region.

At the same time, the best way to contain financial contagion would be to implement a pan European plan to recapitalize eurozone banks.

PARIS European Union leaders concluded 2012 with a landmark agreement that places all eurozone banks under a single supervisor.

Appropriate use of official resources, including for recapitalization of eurozone banks, would be needed to limit collateral damage and contagion.

The choice of tasks to be entrusted to the ECB will ensure rigorous, high quality, and equal prudential supervision of eurozone banks, thereby contributing decisively to maintaining confidence between the banks and thus increasing financial stability throughout the eurozone.

And, because eurozone banks hold a substantial part of their assets in the form of eurozone sovereign bonds, the sovereign debt crisis became a potential banking crisis, worsened by banks other losses, owing, for example, to the collapse of housing prices in Spain.

In Ireland, the three largest banks went crazy for commercial real estate financed by large scale borrowing from other eurozone countries (including Germany).

How could a eurozone supervisor be based outside the eurozone?

Moreover, it has provided loans to the banking sector, recently launching a three year refinancing operation that generated demand from eurozone banks for 489 billion.

Regardless of what Greece does, eurozone banks now need to be rapidly recapitalized, which requires a new EU wide program of direct capital injections.

Scotching the Eurozone

The Eurozone s False Recovery

Poland s Eurozone Tests

A Survival Strategy for the Eurozone

Growing Up in the Eurozone

Judgment Day for the Eurozone

The Eurozone s Autumn Hangover

The Eurozone s Last Stand

Third, to restore credit growth, eurozone banks and banking systems that are under capitalized should be strengthened with public financing in a European Union wide program. To avoid an additional credit crunch as banks deleverage, banks should be given some short term forbearance on capital and liquidity requirements.

The Government the Eurozone Deserves

Demokratisasi di Eurozone

Signs of Life in the Eurozone

Optimizing the Eurozone

The Eurozone s Narrowing Window

Indicators for the eurozone are even worse.

Brady Bonds For the Eurozone

Decision Time for the Eurozone

Democracy versus the Eurozone

The Eurozone s Agenda in 2013

Rebalancing the Eurozone

The Eurozone s Strength in Disunity

A Breach in the Eurozone Dike

The Eurozone s Delayed Reckoning

Three Ways to Save the Eurozone

There is a second solution the exit of Germany from the eurozone or the division of the eurozone into two sub regions.

The Germans have been insisting on institutional change more centralized eurozone control over periphery banks and government budgets in exchange for expanded access to financing for the periphery.

Eurozone Budgets Under the Spotlight

Alexander Hamilton s Eurozone Tour

Eurozone Chutzpah and the IMF

The eurozone wants it both ways.

Golden Rules for the Eurozone