Thursday, April 29, 2010

This is a political crisis for Europe rather than a financial crisis because the only way out for the PIGS involves a large bailout from the northern countries led by Germany and France.  Germans especially don’t want to pay.  It has been clear for some time that the Greeks cheated and lied their way into the eurozone, and for years they have pursued selfish and foolish economic policies.  Why, Germans ask with some force and logic, should German taxpayers who cannot retire until their late sixties pay the bill so that Greeks can retire at 55?
This is spot-on:
It is tempting and superficially agreeable for Americans to gloat about Europe’s troubles.  After all, every time something goes wrong in American domestic or economic policy, European elites and journalists are quick to gloat and find fault.  After listening to two years of stern and self righteous lectures about the ‘failure’ of the American capitalist model, many Americans who deal with the Europeans are quietly enjoying the spectacle of the smug Europeans writhing in helpless indecision and pain over the continent’s self-inflicted wounds.

But bad news for the EU is bad news for us too.  Irritating as a strong EU can be, a weak and divided Europe is much worse.  A peaceful, prosperous and geopolitically boring continent that exports tedious platitudes about global governance is a far better place than any other Europe we have seen in modern times and American national interests are in no way enhanced by economic and political instability in the Mediterranean — to say nothing of Ukraine and Turkey.