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OPINION/Hugo Dixon
'...Parts of the zone’s banking industry are so rotten that taxpayers elsewhere can’t reasonably be asked to bear the burden of bailing them out. A massive cleanup is required first.'
AND : 'Governments and lenders are currently roped together in what has been dubbed the sovereign-bank 'doom loop.'
Weak banks – for example those in Spain, Ireland and Cyprus – can drag down their governments when they need a bailout. Equally, weak governments, such as Greece’s, can drag down their banks when those are stuffed with their own sovereigns’ bonds. By shifting responsibility for bailouts to the euro zone as a whole, the loop could be cut.
The snag is that banks and their governments are entangled in a tight incestuous relationship.'
