THE ECONOMIST: EUROPE’S PROBLEMS IN A NUTSHELL: “When we talk about the debt crisis in Europe, we tend to focus on the specific details—a relative loss of peripheral European competitiveness, accumulation of debt, rising bond yields and contracting economies. But the bigger story is a simpler one: The euro zone’s political institutions did not keep up with its economic institutions.”The Economist goes on to bemoaning the fact that recently elected Finlandish fiscal hawks might stymie the bailout of Portugal, concluding:
How long could America maintain its dominance—or, indeed, its union—if the fact of a secessionist party winning 19% in a Maryland election could prevent the union from undertaking a step critically important to the stability of the American economy?That presuppose that averting a fiscal catastrophe in Portugal is critically important to the European economy. I do not doubt that a Portuguese bailout is important to Portugal's creditors, but I'd be interested to know whether those creditors constituted a greater portion of the ruling or ruled classes in Europe. I suspect that if those creditors lose their shirts, then none could easily deny that the emperor has no clothes.