Here are the slides from the Euro lecture: The Future of the Euro(All Souls).
Today we hear that Belgian bonds have been downgraded. Another day, another problem for the architects of the Euro. They are getting to the point where investors do not wish to lend to any of the Euro area countries, because investors have grave misgivings about the longevity of the currency and the stability of the individual states seeking to borrow money.
I argued yesterday that orderly break up would be the least damaging way of proceeding. If each country had its own currency and Central Bank again, they could start to compete and put in place a domestic growth strategy that might work. There will be substantial losses, but those losses are already there in the system, within the banks and bond holdings. The argument is over how quickly they should be taken, and how the pain should be distributed.
If they wish to carry on with their currency they have to get much faster and bolder at creating their EU state and all purpose Central Bank, to give the currency chance of life, backed by a credible sovereign capable of making the necessary decisions. That poses all sorts of difficult democratic issues.