Leading Economist Analyses Euro Debt Crisis

The swap lines that have been set up between central banks are positive,according to C.Fred Bergsten,Director of the Peterson Institute for International Economics.They show that the Federal Reserve and the Europeans are in communication.The European banks are in need of more capitalisation.This kind of thing buys time.
The European Central Bank has indicated it's not gonna let someone go belly-up,making a Lehman mistake.The Europeans have created this European Financial Stability Fund,which is an embryonic European Treasury.It's something like the U.S. Troubled Asset Relief Program.On the financial support side,I think they're moving in the right direction.
The strong Europeans deserve criticism.The strong Northern Europeans need to take expansionary measures.The Germans have an overwhelming interest in preserving the euro and the European Union.They are the ones who have the heft to make things happen.
The Europeans need to get on a clear path toward fiscal unification to go along with monetary union.In the mean time,the ECB needs to lend to governments and banks to keep the financial system afloat.A two-track strategy is needed,Dr.Bergsten believes.
C.Fred Bergsten has been Director of the Peterson Institute since its founding in 1981.Before that,he was Assistant Secretary of the Treasury for International Affairs from 1977-81 under President Jimmy Carter.