Way back when this blog was young and fresh — January 15, 2002, to be exact — I wrote that
the Euro won’t [last] for just one hard economic reason: Labor has to be exactly as mobile as a currency is widespread. Are unemployed Germans really going to move to Greece during a downturn in Germany, if Greece is where the jobs are?
Mired in recession, Germany is busting out of the 1997 Stabilty and Growth Pact, which was designed to keep eurozone countries from sinking the new currency by using too much red ink. Originally, some worried that chronic overspenders like Greece and Italy would break the euro’s back. But it takes a real powerhouse to sink an entire continent — as Germany did twice the last century.
Only this time, the Germans might scar Europe simply because they refuse to trim down their cradle-to-beyond-the-grave welfare state. Bad news to be sure, but still beats the hell out of the Wehrmacht.