Nightmares of the Eurozone are back to haunt policymakers. This column senses something surreal. The leaders scramble to prevent disaster at the last minute, only to be seen the next minute reverting back to the behaviour that brought them to the edge of despair in the first place. It argues that the Eurozone may be more in need of a psychiatrist than a financial guru.

The unfolding crisis in Europe has focused policymakers’ attention on reducing debt-to-GDP ratios. This open letter to the President of the European Council argues that, while the top part of that fraction is important, the most critical factor in the long run is the restoration of GDP growth – offering several policy recommendations to this end.

Muddling through isn’t working. This column argues that troubled Eurozone nations should simultaneously open restructuring talks while continuing to service their debts normally. Germany, France, and other core Eurozone nations would have to stand ready to recapitalise the banks most exposed to the restructured debt. The ECB would then stabilise the banking system and the EFSF would stabilise sovereign debt. This big bang could be prepared in a weekend; the market already seems to be pricing it in.

Despite its large size relative to the small Irish economy, last weekend’s bailout is not working. Risk premiums continue to rise. This column argues that part of the problem lies in a seemingly innocuous provision in the rescue facility that is to replace the current European Financial Stability Facility in 2013. The argument is tricky, but the heart of the problem is the insistence that rescue financing be senior to private debt while simultaneously ruling out rescheduling of short-term debt.

The Eurozone crisis is not over. This column argues that the bailout of Greece and the €750 billion Special Purpose Vehicle set up in May 2010 was the first step down the slippery slope. The first and only possible remedy is to reconstruct the no-bailout clause and let markets discipline governments; the EU has proven that it cannot.

Bailing out banks has put severe pressure on government finances, particularly in the Eurozone. This column compares 10 EU governments’ explicit bailout commitments with their expected liabilities. It shows that the Irish government’s commitments are an outlier. Faced with a systemic crisis, financial assistance from international institutions is unavoidable.

Is Italy the next European country to go? This column argues that the jury is still out, although the grace period will not extend beyond three years.

The bailout of the Irish government has turned up the heat on Europe’s leaders. This column argues that it is time for a serious debate over one possible solution: A European Sovereign Debt Restructuring Mechanism.

With news that Ireland has applied for a bailout worth tens of billions or euros, the dark predictions for the future of the Eurozone grow ever bleaker. This column argues that the problems in the Eurozone’s periphery expose a flaw in its design. It proposes that the ECB set different interest rates for different member countries to help make matters better before they get any worse.

Record levels of government debt in the EU have forced some countries to call for help. This column presents data from the EU between 1985 and 2009 covering episodes when governments have tried to rapidly lower public debt. It shows that appropriate policies, especially on the expenditure side, can help make this reduction sustainable.