Spoke Landon Thomas, NYT, in London, re the trouble with Greece, and he measures that the word "crisis" is not too strong for the Eurozone and the euro following the downgrade of Portugal's and then Spain's debt. Greece is the well-known basket case. The PIIGS are long mentioned as the weakness in the euro that cannot be solved. The cultures of Germany and Greece do not and cannot solve each other. The Greeks believe in paid leisure at age 62 and a public employee contract that resembles sloth from the Berlin POV. Germany believes in total devotion to industry and a matter-of-fact self-denial until and only if a citizen achieves dotage. Portugal and Spain practice joy -- an alien discipline to the dour Northern Europeans. All great wit here. Love to hear what's wrong auf Deutsch from Angela Merkel -- something deeply Mel Brooks about hearing "must" in the German language. What does this mean for the US? Any strain on the largest trading bloc after the US is a strain on recovery. The euro virus certainly does not help hiring. Thomas tells me that the immediate strain in Europe is the surprises. No one is in charge. The Spain downgrade ambushed the new version of calm. The risk remains the drip, drip, drip of a leak. It is also the fact that there is no captain of the EU ship of state. Just the extremely competent crew of the masterful Germans; the grim, thrifty, cautious, resolved, practical, haughty, relentless, ferocious, joyless Germans. Spoke Don Imus re the German and Greek struggle, and I jested that there was a strange moment for me when, watching a report of the troubled talks in Europe, I imagined an alternative universe where I could hear Mrs. Merkel say to Greece, "Just leave." ("Or we will wipe you out.")
Brief
Joy Not
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Merkel is no fool. She is fully aware that once the bailouts start, there’ll be no end to it. In relatively short order it would reduce the entire Eurozone to fiscal ashes. She also knows that no one (in the world) would step forward to help; first, because no one would feel so inclined; and, second, because everyone knows that it would be like diving into the rapids after a stranger who has already decided his own fate. Merkel sees herself as a backstop. She knows that the PIIGS cannot be saved; that saving them would entail following a similar path (down). She understands that it’s time to close the hatches; reward good fiscal management and allow the others to fail.
Merkel understands that in many places – as is presently the case in the U.S. – the willful destruction of economies (capitalism) has been a dominant theme for some time. It can no longer be looked upon as ‘mistake’. While mistakes can be corrected, ideology can not. If JB chooses to characterize this increasingly rare moment of clarity as “grim, thrifty, cautious, resolved, practical, haughty, relentless, ferocious, joyless” and “dour”, so be it. I find it admirably refreshing.
http://peterkoelliker.blogspot.com/
Ah, the power of nationalism. Europe is not a nation, it is a diverse continent of vastly different cultures. There is no cohesive culture or language.
Germany is not willing to jump on a grenade for Greece, or Italy, or any of the PIIGGS (extra G for Great Britain, I guess Ulster is excluded)
Ireland made hard, very hard choices and cut spending, even pensions (are you listening California?) and can see some daylight in their economy, real property is another issue)
I don't see Greece, Spain or Italy doing the same, the labor parties and socialists are too powerful.
"....Strawberry Fields,
NOTHING is real,
and nothing to get hung about,
Strawberry Fields Forever."
The Beatles made a good point here.
The US recovery is not dependent on what happens in Europe because the trading partners that are rescuing us are in Asia. The welfare-state heavy Europeans should go ahead and sink slowly in the East until they realize their model is unsustainable and do something about it.