Ultimately the euro crisis remains a pressure cooker building up steam despite the protestations of the currency system being saved by multiple political interventions. Yet after a half dozen supranational attempts to instil order within the sovereign nations of the EU, the markets are clearly not listening. Instead a market solution is now needed.

Many commentators have been suggesting a eurobond as the answer to Europe’s problems. However, given that Germany has so far rejected this option, the alternative needs to be a simple programme that rewards prudent debt levels, while providing a space for errant sovereign states to reorganise their finances.

The best solution would be the creation of two separate tiers of eurozone sovereign debt, senior and junior. The upper tranche would represent 30-60 per cent of the debt to gross domestic product limit in every nation. Given the high probability of all nations being able to service this debt tranche, these bonds ought to receive the triple A rating.