What’s more frightening than terrorism, Russian missiles and German tanks?
By Norman Leahy | Tuesday, November 29th, 2011 | EconomicsIt is snowing in hell and the drifts are already getting deep. That’s the only way to explain the astonishing remarks of Poland’s foreign minister, Radoslaw Sikorski, on the eurozone’s desperate condition. How bad are things? Consider this:
What, as Poland’s foreign minister, do I regard as the biggest threat to the security and prosperity of Poland in the last week of November 2011? It is not terrorism, and it is certainly not German tanks. It is not even Russian missiles, which President Dmitry Medvedev has just threatened to deploy on the EU’s border. The biggest threat to the security of Poland would be the collapse of the eurozone.
I demand of Germany that, for its own sake and for ours, it help the eurozone survive and prosper. Nobody else can do it. I will probably be the first Polish foreign minister in history to say this, but here it is: I fear German power less than I am beginning to fear its inactivity. You have become Europe’s indispensable nation. You may not fail to lead: not dominate, but to lead in reform.
Sikorski is not alone in his view. As Shaun noted yesterday, the fear of a euro collapse is palpable, and all eyes are turned toward Germany to save it.
The question becomes whether they want to take the job. It’s not clear that they do. Riding to the rescue of Europe’s wastrels would damage Germany’s economy, driving up its borrowing costs and giving euro-skeptics within Merkel’s coalition fresh arguments for pulling the country out of the union.
But ditching the euro may be the only way out. And some advocate the “rip the band-aid off” approach:
…Hans-Joachim Voth, an economic historian who teaches in Barcelona, feels that the euro’s days are numbered. He considers it advisable for economically strong countries like Germany to withdraw from the euro, because, so he argues, “not every stupid economic idea has to be defended to the bitter end.” In theory, says Voth, the upcoming Christmas holidays could be a good time to take this step, because, as he argues, it’s important to take the markets by surprise.
Markets dislike surprises. One this big, and on this schedule, could turn that sleepy week between Christmas and New Years into days we haven’t seen since the housing bubble burst.
No wonder the Polish foreign minister is so edgy.
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About the author
Norm Leahy has written about Virginia and national politics online since 2002, beginning with One Man's Trash (OMT), and continuing through Bacon's Rebellion (both the blog and the e-zine), Sic Semper Tyrannis, NBC12's Decision Virginia, Richmond.com and Tertium Quids. He is the chief blogger at "The Score" and a producer of "The Score" radio show as well as being a Washington Post contributor.
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4 Responses to "What’s more frightening than terrorism, Russian missiles and German tanks?"
Fix your headline, Norm. There are two “i”‘s in missile.
The end of the Euro will be momentarily painful, esp. for the banks holding sovereign debt in Euros and might very well push all of us back into a recession. In the long term, it will be a very good thing for Europe and will refute the one-worlders who think that our national economies can be differentiated from national politics. Greece is Greece not because of her economy but because of her socialist politics. When she lost control of her currency, it was only a matter of time before the Ponzi scheme collapsed. Thanks to the Eurozone, she just might take all of the rest of us down with her.
Deutschland uber alles now means that the old Deutschland must pay for everyone’s party – forever.
Life was exciting in the Eurozone today.
Because of the credit crunch, there were liquidity problems. A major European Bank was on the brink of collapse last night or so the story goes..
In what may be one of the most important economic events of the year, the FED has poured tons of money into the Banks.
Why are we borrowing from Chinese Peasants so that we can lend to European Banks?
How long will this fix work? A week maybe.
Britain has entered a second credit crunch, Downing Street said on Wednesday night, as America was forced to intervene to stop the eurozone crisis leading to a global financial collapse.
Take 2 aspirin and check the news tomorrow.
http://www.telegraph.co.uk/finance/financialcrisis/8927148/Britain-has-entered-second-credit-crunch-confirms-Downing-Street.html
In an interview with The Daily Telegraph, Jacques Delors, the former president of the European Commission, claims that errors made when the euro was created had effectively doomed the single currency to the current debt crisis. He also accuses today’s leaders of doing “too little, too late,” to support the single currency.
http://www.telegraph.co.uk/finance/financialcrisis/8932647/Euro-doomed-from-start-says-Jacques-Delors.html
Figure around Wednesday, a “NEW” financial crisis should occur in Europe.
One problem seems to be that some European governments are faking financial data big time, so who knows exactly what is going on?
Then again the “real” unemployment rate in the US is between 17 and 21 percent. And what does the government say?
When a country has a 17% unemployment rate, the country is in a depression.
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