I recently returned from a visit to
But I flew out of the capital city of
The reason for these convulsions lies in the current crisis within the euro zone, and the fissures that are opening up in the credit ratings of the stronger national economies, and the less competitive or "weaker" economies, generally along the fringes, such as
The 2008 international banking crisis, and the growing worries by investors about the U.S. government's own very lax fiscal policies, its colossal indebtedness and its mountain of bad housing loans, changed all that. It was therefore probably inevitable that the spotlight would swing across the Atlantic, to highlight those nations which had similar budgetary problems but which could not, like the profligate U.S. Treasury, simply print more and more dollar bills.
And why cannot
None of this escaped the notice of international investors, and especially those foreign banks and hedge funds who slowly began to realize that they may have put their funds into dubious goods, like buying an attractively decorated nag in a
What does this mean for the weaker economies and their peoples? It means that, in simply having to repay foreign obligations and ensure that bonds are refinanced, they not only have to pay the higher interest rates demanded by the market, but also demonstrate the greatest determination in cutting the government's large deficits: Taxes must be raised and official spending heavily cut, say the pundits.
Which brings us back to
Thus, the governments of
So, why not? The answers are equally clear. It would be a massive blow to national prestige to pull out of the euro. It would leave the escudo, or drachma, completely exposed to international currency turbulences, without any ECB protection. And it would set back the European venture enormously. No one can predict if the outcome would be (painfully) good, or disastrous. This was, after all, why Hamlet in his famous "To Be, or Not to Be" soliloquy decided that he would "Be." The unknown was too risky.
This leaves the stronger European economies, especially
"Gouverner, c'est choisir," the old French saying had it: "To govern is to choose." Sometimes governments may ardently wish they didn't have to choose. But of course they must. Some day. Some time.
- The Double Dilemma Facing Weaker National Economies
- German Chancellor Warns Financial Crisis Solution Will Take Years
- Bank of England Warns U.K. Banks that Eurozone Crisis Poses Biggest Threat
- Major Economies Headed for Slowdown
- Is the National Security Complex Too Big to Fail?
- Troubled Spain Elects New Leadership
- What Happens if Italy's Economy Collapses?
- Europe's Crisis and the Radical Right
- Is Europe Over?
- Europe's Crisis: Beyond Finance
- Uncertainty Rises as Eurozone Crisis Deepens
- Balkans: EU Will Help But Countries Must Reform
- Papademos, New Coalition Government, Tackle Greek Crisis
- Greece: Banker to Head Coalition Government
- Restructuring Euro Debt and Latin Lessons
- France Planning Eurozone Breakaway
- Senior Banker Lucas Papademos Named New Greek Prime Minister
- Italian Debt Reaches Unsustainable Level
- The Perverse Side Effect of the Euro
- Europe's Crisis Is a Global Issue
- Europe, the International System and a Generational Shift
- Europe's Economic Measures Too Little Too Late
- Crisis Gratuitously Self-Inflicted
- Europe's Structural Reforms Are Serious
- Papandreou Survives Vote, Uncertain Coalition Pending
- Greece In Chaos as Papandreou Faces Confidence Vote
- On WWII Anniversary, Greeks Say 'No' Again
- Greek Workers and Pensioners: The Damage Is Done
- EU Candidate Status Rejection Means Less Money for Albania
- Albania-Kosovo Agreement Rekindles Old Suspicions
- EU Urges Kosovo to Plan New Strategy for North
- Turkey Ratifies Railway Agreement to Integrate with Balkan States
- Ankara Intimidating Academics, Restricting Free Speech
- Europe's Woes Make Their Way Across the Mediterranean
- Democracy in Revolution: the Mediterranean Moment
- Riots and Revolutions in the Digital Age
- When Do You Know You Have Crossed a Watershed?
- Global Financial Regulation: Goal Many Espouse But Can It Be Done?
- Forging a Lasting Peace
- Eurozone Needs Exit Rules
- Euro Zone Rescue: Deja Vu All Over Again
- Eurozone Rescue or Recession? Fallout of the October Package
- European Union Leaders Reach Deal on Greece, but Worries Remain
- EU Leaders Announce New Eurozone Rescue Deal
- Can Europe's Divided House Stand?
- Greece's Youth: 'I Have No Hope'
- Battle for the Hearts, Minds and Wallets of Greeks
- France Teetering on Edge of Financial Precipice
- Why Care About the French Presidential Race
- Counterrevolution in Kiev: Hope Fades for Ukraine
- The Dying Bear: Russia's Demographic Disaster
- Bulgaria, Romania and Greece Initiate EU strategy for Balkans
- Irish Elections: From Paramilitary to Presidential Nominee
- Was the IMF Program in Iceland Successful?
- Turkey: Is Quake Aftermath Widening Ankara-Kurdish Rift?
- Turkey's Never-Ending Kurdish Question
- Turkey's Earthquake Strikes at Poorest
Copyright 2011, Tribune Media Services, Inc.