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The bleak view of Europe right now 2010-May-18 at 09:30 PST

Posted by Scott Arbeit in Blog.
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The Euro’s Lost Promise, by David Marsh, 17-May-2010

In any international crisis, there will be those who believe that the crisis-in-question merely portends an even more difficult future.

The dream of monetary union across Europe has turned into a nightmare. Led by France and Germany, European countries have decided to spend colossal sums of taxpayers’ money they cannot afford to heal mounting internal disparities they cannot conceal to shore up an edifice many believe cannot stand.

Yeah, well, when you look at it that way, it does suck.

Look, the voters in Europe aren’t all that different from the voters in the United States. It’s not like they’re all at Exit Green, just about to pop to Second Tier.  There are lots of them at Blue, lots of them at Orange, and lots of them at Green.  Just shift the center of gravity up about half a level from where the United States is, and you’re getting the picture.

And even within that group, there are different countries with different centers-of-gravity… just like we have amongst the states here.

Some of those countries will have an easier time understanding why this bailout had to be done, and some will have a much more difficult time.  That’s to be expected.  So the rollercoaster we’re about to go on will, sometimes, look a lot like Mr. Marsh is describing.

There was, however, one thing I heard in the article that made it clear to me where Mr. Marsh was coming from.

Decisive backing came from President Obama, who on the eve of the Brussels meeting telephoned Mrs. Merkel to warn her that Europe’s failure to act could set off another worldwide credit crunch. His intervention was incongruous in the extreme: an American president urging the German chancellor to shore up a currency union that was meant to bolster Europe’s financial independence from the United States.

If you can’t imagine that President Obama would want to weigh in on something that could affect the lives and happiness of over 830 million people in Europe, and billions more around the world trying to do business with Europe… you probably also have a needlessly pessimistic view of things in general, and perhaps a center-of-gravity from somewhere in First Tier which would make global cooperation seem “incongruous.”

So let’s be clear… this is the bleak view of things.  This is the warning from those who think the worst-case is coming: the dismantling of the Euro, which could lead to growing tensions and competition amongst those countries who no longer make common cause over currency.

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