NEW YORK (TheStreet) -- The eurozone continues to suffer from an existential and economic crisis, but there are tools the region can use to get its economic house in order, according to Maxime Sbaihi, eurozone economist at Bloomberg.

Sbaihi said the first option is to introduce the possibility for member states to restructure their debt. He notes that while debt restructuring isn't banned by any treaties, in remains taboo.

But Sbaihi said this is an alternative to prolonged austerity, while lifting the ambiguity that led to the mispricing of sovereign risk before the financial crisis. He said the trick is to alleviate some of the public debt burden in an orderly way, avoiding financial disruptions or moral hazard.

Sbaihi also suggested that Europe fulfill the Capital Markets Union, which was launched by the European Commission last year. The union would create extra lending capacity to complement the banking union.

Sbaihi said that presently the European economy is too dependent on its banking sector, with about 80% of nonfinancial corporate debt composed of bank loans. He said this overreliance was highlighted during the financial crisis when banks shut off credit as soon as they started experiencing severe turbulence, and there was no alternative financing route available.

Finally, Sbaihi supported the idea of creating competitiveness councils, which would result in a new oversight body in each member state. Their role would be to monitor competitiveness indicators, compare them with peers and eventually formulate wage proposals for employers and employee representatives. He said these nonbinding recommendations would provide a valuable public touchstone for wage negotiations, which vary from one member state to another.

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