Europe's debt crisis opened the new year with the same old: The euro dipped against the U.S. dollar Monday as the credit struggle of several members of the now 17-nation currency bloc continued in force.

What's in store for 2011?

European bondholders and policy makers face severe headwinds that may make a restructuring of sovereign debt necessary, Moody's Analytics says in a report that sees the continent's credit crisis as the biggest threat to the global recovery.

"Europe might still be able to muddle through, but an orderly restructuring of sovereign debt is looking more desirable as the damage to budget cuts mounts and as high-debt countries struggle to escape recession," economist Andres Carbacho-Burgos said in a recent report.

European officials, Mr. Carbacho-Burgos wrote, clung for "too long" to their beleief that austerity measures and bailout funds were enough to tackle the debt troubles in the periphery countries at the heart of the euro crisis. And now, proposals have come too late to avert "draconian" measures, rising unemployment and eroding economies.

"For months, officials seemed to believe the crisis was wholly a product of the debtor countries' misbehaviour. It is now clear that this incorrect."

The euro zone's debt crisis was heightened by imbalances between its core members and the periphery countries, Mr. Carbacho-Burgos noted, citing, for example, prices and wages that were far higher, relative to productivity, in Ireland, Spain and Italy when compared to France and Germany. This also widened the trade imbalances.

Now, he said, the measures necessary to fix those imbalances may be politically unsustainable. Not only that, but "it is hard to escape the conclusion that austerity will not end the debt crisis, and that restructuring may be necessary."