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Interest rates do not have to be identical across the whole euro area, but it is unacceptable if major differences arise from broken capital markets or concern about a euro area break-up.

I don't want euro bonds that serve to mutualize the entire debt of the countries in the euro zone. That can only work in the longer-term. I want euro bonds to be used to finance targeted investments in future-oriented growth projects. It isn't the same thing. Let's call them 'project bonds' instead of euro bonds.

So if the euro, if Euroland is to become a reserve center, if the euro is to become a reserve currency, Euroland will have to have a deficit in its overall balance of payments.

Well, as I said, you know the issue of Greek debt, they've grasped the principle of debt reduction. I think most people would argue that probably more needs to be done on that front, and they've just begun to take the first steps to accepting that there's going to have to be much closer economic integration in Europe.

At this time - we're in a dramatic crisis - euro bonds are precisely the wrong answer. They lead us into a debt union, not a stability union. Each country has to take its own steps to reduce its debt.

I think that France has not made it clear enough recently to our German friends how important it is to introduce euro bonds as a tool against speculation. And how the necessary budget discipline needs to be accompanied by growth.

We know that advanced economies with stable governments that borrow in their own currency are capable of running up very high levels of debt without crisis.

But sovereign debt is a wider question not only in Europe but across the globe. While every country is a unique case, I think it's not an issue of countries acting on their own. We need a more coordinated strategy not only in Europe but around the world.

Greece is a medium-sized country in Europe. Our debt accounts for only 2.5 percent of the total of all members of the euro zone.

There was a real fear that a euro-zone bank might fail, that we'd have a sovereign debt problem in one of the larger European economies. That's dissipated, thanks largely to the action of the European Central Bank.