The recent failure of Deutschland to sell its debt stems does not stem the market thinking Deutschland is not credit-worthy. The very idea is absurd. The problem derives from suspicious as to whether the Euro will survive. Who wants to own bonds denominated in a currency that might cease to exist in a few months?
The solution is for the ECB to act a bit more like a normal central bank / government and create and spend money into the Euro economy. This comes to much the same thing as the Euro distribution long advocated by Warren Mosler (see para starting “The ECB would create…”).
Or have I missed something?