It's President Obama's favorite expression -- "a false choice" -- but it seems like the right expression for what pundits are describing as the Eurozone's only alternatives at this point: issue eurobonds or face chaotic default. But, are these really the only choices?
What about a workout -- Argentina style? Why won't that work? A debt workout would likely be a win-win for the Eurozone debtors and their creditors.
The market has already set the stage for such a workout for Greece, whose outstanding debt is now trading at a fraction of its originally issued value. Why not go the rest of the way by offering creditors repayment with a substantial haircut? That would then set the stage for similar "workouts" across Europe.
This would reduce Eurozone debt, force creditors to absorb some of the impact of their poor investment decisions, and avoid the austerity measures that can only lead to political upheaval.
No need to abandon the Euro. All that is needed is a touch of realism