When it becomes necessary, the Eurozone will step forward to support its weaker members. The major economies of the Eurozone fully realize that they have no choice to do so given the degree of economic integration that has already taken place.

The U.S. is far more exposed to the current crisis than Europe given the poor balance sheets of of U.S. households, its meager social safety net and weak economic stabilizers.

The Eurozone’s problems can be readily solved by a mix of loans, bank guarantees, bank equity injections and fiscal stimulus, all in moderate size, all standard fare. The U.S. on the other hand, requires a massive fiscal stimulus and massive borrowings (which may or may not be financed by foreign surpluses)to stabilize its economy and to prevent ongoing deflation and extremely high unemployment.