Europe's debt crisis is back

The half-life of solutions to Europe’s debt problem is getting ever shorter. Recent hopes have relied on the ostensible success of the European Central Bank’s (ECB’s) LTRO — Long Term Refinancing Operation, more appropriately termed the Lourdes Treatment and Resuscitation Option. In December 2011 and February 2012, the ECB offered unlimited financing to European banks at one per cent for three years, replacing a previous 13-month programme. Banks drew over euro 1 trillion under the facility — euro 489 billion in the first round and euro 529.5 billion in the second.

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