The frustrating thing about all this is that there is a ready-made solution. If the European Central Bank were to commit publicly to backstopping Italian and Spanish debt, by buying as many of their bonds as needed, the worries about default would recede and interest rates would fall. This wouldn’t cure the weakness of the Italian economy or eliminate the hangover from the housing bubble in Spain, but it would avert a Lehman-style meltdown, buy time for economic reforms to work, and let these countries avoid the kind of over-the-top austerity measures that will worsen the debt crisis by killing any prospect of economic growth.
Dan Drezner thinks Surowiecki is oversimplifying:
A deal could be reached, but no one should be kidding themselves — it is fantastically difficult, and saying that just "politics" or "ideology" or "psychology" is getting in the way doesn't make it any easier.