The Solvency Crisis will require us to address not just Irish bank restructuring, but Ireland's sovereign debt-it is impossible to distinguish the two, given that the Irish state has guaranteed all the Irish banking system's liabilities-and the solvency of other peripheral eurozone economies.

In my view, it is a Crisis of Solvency not liquidity that at some stage has to be addressed.

Let me say first, however, that the lesson of history shows that it is not possible to deal with a Solvency Crisis by providing liquidity package after liquidity package, because that does not reach the heart of the issue.

So while some member states face a Crisis of Solvency, the institutions of the EU face a crisis of credibility.