People like William Buiter are feeling free to chuck around assertions that the periphery countries of Europe are all insolvent.
The crisis, which I fully expected to subside with the irish bailout until Q1, is continuing. Goldman Sachs' intervention suggests that the US is keen to keep the Euro area in focus for a while and see what damage it can inflict on Germany and France. German bonds are now tracking the perphery bonds, the crisis is everywhere.
There are though only 2 real options left now:
1. Massive Quantitative easing from the European Central Bank. The bailout funds are not big enough or accessible quickly enough so a one off debasement will really help here. Of course, this is great for German exports and less good for the US where it is itself using quantitative easing to try and devalue its currency.
2. Full Fiscal Union - the other approach is to end nation state soveriengty over their own fiscal affairs. Bonds issued centrally would be of better able to finance the periphery and only marginally more costly to Germany and France.
However, which of these is easier to implement politically and practically. Number one by a mile; more QE it is then....