Euro area has to establish creditor-debtor relations

© Scanpix/AP

Rationalization of the euro area by dividing the members of the Eurozone into two groups- creditors and debtors appears to ease the financial difficulties in the Eurozone. Creditors, more stable countries around Germany, would have to accept a trade-weighted appreciation of 20% that might impact the exports but at the same time consumers and importers will gain on the better terms of trade. The measure will allow rationalizing trade balance among wealthy countries that suffer from high inflation caused by trade surpluses and troubled debtor countries suffering from trade deficits.