The Euro area has experienced structural divergence with many countries losing competitiveness, unsustainable private credit expansion, weak control of public sector finances and most recently the crisis of refinancing Greek government debt. The common underlying cause has been gross capital market inefficiency. This paper proposes measures to address the inefficiencies in the market for Euro area government debt, through limited tax-payer liability for repayment; limits on cross-border bank holdings; radical increase in maturities; and predefined official short term liquidity arrangements. Such measures are needed if other Euro area member governments are to avoid refinancing crises while maintaining their fiscal independence.