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Peter Nomikos is a very, very wealthy Greek businessman, and he believes he has a solution to his country's debt crisis. Nomikos, heir to a shipping fortune, has set up a charitable organization and is asking all Greeks to donate and pay down the countr's debt. We're not convinced this will work, but it is worth watching, and Nomikos deserves credit for at least trying another path. Der Spiegel interviewed Nomikos about Greece Debt Free , and asked him why his plan is better than just getting all Greeks to pay their taxes: Nomikos : The difference is that with taxes, you don't know what they are being used for. There is a lack of trust in the state, and I am not going to pretend that I can solve this cultural problem. But Greeks are also great patriots, and I think we should harness this feeling. A euro for "Debt-free Greece" is not a euro in taxes lost. It is complementary. SPIEGEL ONLINE : What is the reaction from the Greek government? Nomikos : Many people in the government and the diplomatic community find our campaign very encouraging. But remember, we are non-political and non-governmental. It is the first real show of a private Greek citizen to organize other Greeks to address our biggest problem. It shows to the world that we are taking initiative. SPIEGEL ONLINE : You established the foundation in the US state of Delaware. Why not in Greece? Nomikos : In Greece, I couldn't be sure the money would remain untouched. Also, being a US charitable foundation means that American taxpayers can deduct any donation from their taxes. It is an incentive for the wealthy Greek diaspora in the US. SPIEGEL ONLINE : And for other nationalities as well? Nomikos : Any friend of Greece is welcome. Originally, I thought mainly diaspora Greeks would participate. But there has been a huge amount of interest from the business community within Greece. Some companies are marketing their products with our slogan "Debt-free Greece" and pay part of the profits into our campaign. Read the full interview here .

European bankers and policy makers remain focused on the debt crisis. Jeff Frankel points out that they have a big challenge. It is hard to " commit today to fiscal rectitude in the future," Frankel says, while successfully fixing the urgent crises in Greece and Spain. One solution might very well be setting up bonds that are EU bonds instead of separate member-nation bonds. Frankel: The creation of a standardized Eurobond market would bring a boost to help a reform plan come together, badly needed in light of the damage that years of failed euro summits have done to official credibility. Even when the euro was at the height of its success five years ago, it suffered from lack of a counterpart to the US Treasury bill market. Bonds are issued by the 17 member governments. This fragmentation has hindered European financial integration and impeded any bid by the euro to rival the US dollar as international reserve currency. Central banks in China and other big developing countries are still desperate for an alternative form in which to hold their foreign exchange reserves, an alternative to holding US government securities, that is. US Treasury bills pay extremely low interest rates, and the value of the dollar has been on a negative downward trend for 40 years (even since President Richard Nixon took the dollar off gold and devalued in 1971). Despite all of Europe’s problems, a Eurobond would be attractive to central bankers and other portfolio investors around the world, both to achieve higher expected returns than on US treasury bills and to diversify risk. But that latent global demand for Eurobonds will not come to the table unless they are by design backed up with solid economic and political fundamentals. An interesting proposal. And one that faces many hurdles in the political arena. Frankel goes on to suggest a particular type of bond that he thinks is most likely to work: The version of Eurobonds that might work is almost the reverse of the Germans’ Redemption Fund proposal. It goes under the more colorful name of “blue bonds,” originally proposed two years ago by Jacques Delpla and Jakob von Weizäcker at the think tank Bruegel . Under this plan, only debt issued by national authorities below the 60% criteria could receive eurozone backing, be declared senior, and effectively become Eurobonds. These are the “blue bonds” that would be viewed as safe by investors. When a country issued debt above the 60% threshold, the resulting junior “red bonds” would lose eurozone backing. The individual member state would be liable for them. This proposal structures the incentives “right side up.” The blue bonds proposa l has been extensively debated in Europe. As usual in such controversies, many participants in the euro debate fixate on one evil or the other –moral hazard or austerity — and fail to grapple with practical proposals to balance the two. As I see the plan, the private markets could make the judgment as to whether a country was in the process of crossing the threshold, even before the final statistics were available, and therefore whether default risk on the new red bonds required an interest rate premium. If private investors judged that the new debt had genuinely been incurred in temporary circumstances beyond the government’s control (say a weather disaster), then they would not impose a large interest rate penalty. Otherwise, the sovereign risk premium mechanism would operate on the red bonds, much as it does among American states, and much as it did in Italy, Greece and the others before they joined the euro. Similarly, if the ECB after 2000 had operated under a rule prohibiting it from accepting as collateral the debt of SGP-noncompliant countries, the entire euro sovereign debt problem might have been headed off early in the decade. Read the full post here .

International Monetary Fund Managing Director Christine Lagarde tells Charlie Rose that, while a lot of hard work has been done by Greece's politicians and citizens, and Europe's policy leaders, there is much work to be done. And to avoid a deepening crisis the European partners, the private sector, and the Greek authorities have to work together. Here is an excerpt of Rose's interview with Lagarde: Watch the full interview here .

After twelve hours of meetings in Brussels, European Union leaders have agreed to a 130 billion euro ($170 billion) bailout of Greece . This was seen as a last minute deal to stave off Greek default. But there is much work to be done. As Dow Jones 's Terence Roth tells his colleague Nick Hastings , this agreement was essential because it gives Greece's leadership just enough time to do all it must do to avoid collapse.

Martin Feldstein calls Greece's mix of overwhelming government debt and a free-falling economy an "otherwise impossible situation." Greece will default, as Feldstein argues that is the only way out. But after it defaults, will it leave the euro zone? Having its own currency just might open more options. Feldstein argues there are two reasons that the key influencers in the Euro zone (Germany and France) do not want Greece to leave. At least not just yet. From Project Syndicate : First, the banks and other financial institutions in Germany and France have large exposures to Greek government debt, both directly and through the credit that they have extended to Greek and other eurozone banks. Postponing a default gives the French and German financial institutions time to build up their capital, reduce their exposure to Greek banks by not renewing credit when loans come due, and sell Greek bonds to the European Central Bank. The second, and more important, reason for the Franco-German struggle to postpone a Greek default is the risk that a Greek default would induce sovereign defaults in other countries and runs on other banking systems, particularly in Spain and Italy. This risk was highlighted by the recent downgrade of Italy’s credit rating by Standard & Poor’s. A default by either of those large countries would have disastrous implications for the banks and other financial institutions in France and Germany. The European Financial Stability Fund is large enough to cover Greece’s financing needs but not large enough to finance Italy and Spain if they lose access to private markets. So European politicians hope that by showing that even Greece can avoid default, private markets will gain enough confidence in the viability of Italy and Spain to continue lending to their governments at reasonable rates and financing their banks. Read Europe’s High-Risk Gamble here .

Paul Krugman is tired of reports on the financial mess of Greece and other European nations that only cover the problems of debt and fiscal discipline. He thinks, as he writes in his New York Times column, that we should use this opportunity to look more closely at the Euro. Did countries like Greece and Spain adopt the currency before they were ready? Krugman argues they did, and that the problems of their debt are harder to fight as a result. Consider Spain. Krugman writes: The nation’s core economic problem is that costs and prices have gotten out of line with those in the rest of Europe. If Spain still had its old currency, the peseta, it could remedy that problem quickly through devaluation — by, say, reducing the value of a peseta by 20 percent against other European currencies. But Spain no longer has its own money, which means that it can regain competitiveness only through a slow, grinding process of deflation. Now, if Spain were an American state rather than a European country, things wouldn’t be so bad. For one thing, costs and prices wouldn’t have gotten so far out of line: Florida, which among other things was freely able to attract workers from other states and keep labor costs down, never experienced anything like Spain’s relative inflation. For another, Spain would be receiving a lot of automatic support in the crisis: Florida’s housing boom has gone bust, but Washington keeps sending the Social Security and Medicare checks. But Spain isn’t an American state, and as a result it’s in deep trouble. Greece, of course, is in even deeper trouble, because the Greeks, unlike the Spaniards, actually were fiscally irresponsible. Greece, however, has a small economy, whose troubles matter mainly because they’re spilling over to much bigger economies, like Spain’s. So the inflexibility of the euro, not deficit spending, lies at the heart of the crisis. Read The Making of a Euromess here .