How to rescue the Euro?

I am on the Inet Council on the Eurozone Crisis. Yesterday, we published a statement on what to fix if one wanted to get serious about resolving the current mess... it's a tall order, with possible debt mutualization and changes to the remit of the ECB on the table. The change in what counts as alarmist and excessively negative over the last 9 months or so is really quite striking. Even half a year ago, one could not say "end of the Euro" without the majority of listeners shaking their heads and saying "surely it won't come to that." Personally, I am sceptical that Europe has the political will (and economic acumen) to sign up for such the monumental effort that we wrote into INET program to save this failing project, but we'll see.

How will the end come, if it does come? One can speculate endlessly, but I think we have a likely scenario now: Spain will lose market access in a matter of weeks, meaning that bond yields hit 8%+, and the Spanish government gets a full-blown bailout. A Greek exit, extremely likely now, will hardly matter. But Italy will starts to wobble once Spain goes, and there is no chance in hell that Northern European countries have the stomach for the bailout required in the case of Italy. Then, it is either monetization of debt issues by the ECB, or game over. The hard-money countries are now in a minority on the ECB council... and once they push for vote for the home team, the Germans may decide to bail out. Probability? ~50%, if you ask me.