The Sick Man of Europe is… Europe
Lawrence Summers on Europe:
Perhaps it should not be surprising that Europe still looks to be in serious trouble. Growth has been dismal; the euro-zone gross domestic product has been below its 2007 level for six years, and little growth is forecast this year. For every Ireland, where there is a sense that a corner is being turned, there is a France, where questions increasingly arise about the political and economic sustainability of policy.
The controversy surrounding the decision by the European authorities to bail out Cypriot bank depositors suggests the degree of fragility in Europe. The idea that converting a small portion of deposits into equity claims in an economy with a population of barely more than 1 million could be a source of systemic risk suggests the hair-trigger character of the current situation.
I’m worried about Europe now in a way I haven’t been, since just before Gorbachev refused to send in the tanks in the fall of 1989.
And he gets all his information from NPR.
*sigh*
The trick is, to fool enough people to vote for it in the first place. It's like voting to give yourself TB. Once you have it, you've got it.
Before that fateful decision, there was every reason, based on prior history with Soviet imperial policy, to expect that the tanks would indeed roll, and that a crisis might unfold destabilizing the Cold War balance in ways no one would much appreciate.
It helps to remember -- for all that the world was simpler then, it was largely because it was perched on a knife's edge.
Personally, I've got very little attention span left for Europe. I'm too busy worrying about the U.S.
I have been paying attention to Cyprus, though. Now that the taboo against abrogating deposit insurance has been broken, the real end-game begins. Things are gonna get real, now.