"What exactly will be the job of Enrico Letta and his new government? (...) I would interpret the prime minister designate’s mandate from President Giorgio Napolitano thus: 'Do whatever it takes to make the country's position in the eurozone sustainable, and do so without defaulting.' (...) Mr Letta has already announced that his priority will be to end austerity. (...) The problem with austerity is not merely that it is socially unfair and politically hard to do. With interest rates close to zero, it also becomes self-defeating. So Mr Letta is right to prioritise an end to austerity. But he will require good diplomatic skills to win European assent for his promised regime shift. The second priority should be to fix the banks. (...) Unless the European Central Bank is ready for some extreme action -- which does not seem to be the case now -- the only solution to this problem would be a genuine and retroactive European banking union. (...) Unfortunately, this is not an issue Mr Letta can sort out unilaterally. He will need to find a way to persuade the leaders of the so-called creditor countries to open up to such a union. I can see only one scenario under which that can happen. They will need to be confronted with a straight choice between a common backstop or a break-up of the euro."
Wolfgang Munchau, "