Europe's Simmering Financial Crisis
by Darris McNeely
Source: Photos.comThe crisis in Europe is still simmering even though it is not dominating headlines right now. Greece is rioting, Spain, Italy, and Austria have received credit downgrades. German Chancellor Angela Merkel is being accused of leading Germany and Europe down the wrong path. No one has a solution even though the obvious answer is staring them right in the face.
Germany is the leading manager of this crisis and in truth the one country that is responsible for the current situation. Germany pushed hard for the single currency but, like all other EU members, did not want to give up sovereignty to another authority. The result was a single currency, the Euro, without effective political union. What many predicted more than ten years ago has now come to pass. A massive debt crisis with no effective way to manage and remove it. One observer describes it as "a machine from hell". The need for political union is obvious but it is the most feared of solutions.
The Financial Times (subscription required) puts it this way. "...the current crisis shows that Greeks, Germans and Italians do have one important thing in common – a deep aversion to ceding control of their national budgets. The result is that the euro is in a dangerous and unstable position. The actions that are being urged on Germany are unreasonable. But Germany’s own solution – structural reform now, political union later – is unworkable".
The fear of a strong Germany controlling the future of Greece or any or insolvent European country immediately evokes words like "Auschwitz" or "Nazism".
Behind the scenes leaders are very worried about the outcome. The crisis simmers waiting for a bold solution from somewhere.
Germany is the only nation that can steer Europe back into calm and stable waters. Watch for some further crisis to appear and create the right conditions for a group of core nations to cede political and operational control to a power that can right the ship. It will come and when it does it will redraw the current European scene.
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