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The Tough Love the Euro Zone Needs

Mike Kemp | Getty Images

It's not easy to wade through the talking head commentary on fixing Europe. This think-tank leader provides a breath of fresh air.

I suppose if 17 countries have to agree on a bailout, and the rest of us get to bite our nails while Malta or Slovakia decides whether to do the right thing, the talking heads will have to weigh in.

Which makes this commentary by Jean-Pisani Ferry, director of the Brussels-based think tank Bruegel, all the more welcome. Here's how Ferry lays out the challenge today:

"The key issue is the set of principles which will underpin the construction of a more robust monetary union. The main cause of the creeping fragmentation which is observable is the mutual dependence of banks and governments.

In the Eurozone banks are vulnerable to sovereign debt because they hold a lot of public paper, frequently issued by their country of origin, and the governments are vulnerable to bank crises because they are individually responsible for rescuing national financial institutions. Every episode in the crisis illustrates how much this interdependence is a source of fragility."

He has recommendations, too. Read on.

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