For two years now, Eurozone leaders have tried to deny reality, concocting one temporary bailout scheme after another in an effort to sweep Europe's budget problems under the rug.
But this game is nearing its end, says Rupal Ruparel of London-based think-tank OpenEurope.
A crisis that began in countries like Greece that seemed too small to worry about has now spread to countries like Spain and Italy that are big enough to take the whole Eurozone down. The only way to actually solve the problems, says Ruparel, is to acknowledge the facts: "Austerity" programs won't help countries pay back their debts. Either the whole Eurozone has to combine its fiscal spending--a solution in which German taxpayers would pay for Greece's deficits--or the debts have to be restructured.
Ruparel believes the "fiscal unity" solution is politically untenable. So that leaves restructuring.
A planned restructuring will be painful, Ruparel says, but it will be a lot less painful than a market-forced one. And the sooner Europe's leaders acknowledge this and get cracking, the better.