Will 2013 usher in the end of the Eurozone Crisis?

The question above was put to me by a Brazilian journalist. I would have loved to answer in the affirmative. Only it would be misleading and dishonest to do so. Here is the answer I sent him:

The reason the Eurozone is in crisis is that Europe’s leaders are in denial about its nature. As a result, for three years now, they have been addressing the symptoms locally without any systematic attempt to address the systemic crisis systematically. Has anything changed in the past months to inspire any degree of hope, let alone confidence, that 2013 may see the end of the Eurozone’s troubles? Absolutely not. Hope would have come if our leaders had attempted to do at least two things. First, to decouple the banking crisis from the public debt problem. This they agreed to do in the June summit but since then their agreement has fallen by the wayside. Secondly, they needed to decouple the public debt emergency from the recessionary dynamic which is damaging both the private sector and the state’s capacity to refinance itself. On this front, there has not even been a discussion, let alone concrete steps in the right direction. Instead, we have had more loans for the bankrupt banks and states on condition of austerity that diminishes their capacity to repay them. Thus, I am compelled to conclude that only by divine intervention will 2013 shine rays of light and hope upon us.