ECB holds Key to resolve Euro Crisis

In the Swiss news paper NZZ economist Barry Eichengreen argues that only the ECB can resolve the Euro Crisis by guaranteeing maximum yields by buying Euro government bonds:

• There are no inflationary pressures since this debt crisis is deflationary. So stop worrying about the increased monetary base.
• The discussion about ECB independence is ludicrous, because the ECB will cease to exist should the Euro break up.
• Forget the EFSF! It is to small and nobody will ever give money for leveraging it.
• Southern European countries should get their fiscal situation in order, but at the same time implement policies to increase economic growth in the long term. 

BCA has held a webcast today where chief editer Peter Berenzin essentially argued on the same ground. Moreover, he said that German banks would become insolvent should in an Euro break up Spanish and Italian debt be converted into devalued Pesetas or Lire...