Probably the best (and politically impossible) way to deal with the European and the world-wide economic crisis would be to write off all debt and start over with a new way of creating money – one that is not based on debt. There is so much debt now that it is hard to see that it can ever be repaid.
If there is any such thing as funny money it has to be the money we now use which is based on fractional reserves and debt. Throw in the interest which is charged on the debt-money and we have a ponzi scheme. So long as there is steady economic growth it sort of works but as soon as there is an economic slowdown or decline it crashes.
I have tried to explain how money is currently created and some of the problems in an essay “LETS go to market: Dealing with the economic crisis” posted on this weblog. I also propose an alternative way of creating money based on the Local Exchange Trading Systems currently being used in several locations around the world.