A Couple of Perspectives on the Eurocrisis

Christopher Booker in the UK Telegraph sees the Euro's economic problems as rooted in the E.U.'s political hubris:

Greece was just the antipasto: Italy, Spain, Portugal and others are now hanging over an abyss of debt which scarcely all the money in Europe could fill – created by countries living way beyond their means, thanks not least to the euro's low interest rates…

What we are witnessing here is a judgment on the entire deceitful and self-deceiving way in which the "European project" has been assembled over the past 53 years. One of the most important things to understand about that project is that it has only ever had one real agenda. Everything it has done has been directed to one ultimate goal, full political and economic integration….by far the most important project of all was locking the member states into a single currency.

This was always above all a political not an economic project, to be driven through at any cost, which was why all those "Maastricht criteria" laid down to bring it about were repeatedly breached….

As was advised by Sir Donald MacDougall's report to Brussels in 1978, it could only work if, following the US model, between 20 and 25 per cent of Europe's GDP was available to such a government, to enable a huge transfer of wealth from richer countries such as Germany to the poorer, more backward countries of southern Europe – and how ironically has that come about!

When the 10-year-long construction of the euro began in the 1990s, all these warnings were ignored. The cart was put before the horse. So fixated were the Eurocrats on the need to get their grand project in place that the "rules" were treated as mere window dressing. The member states were locked together willy-nilly in a one-size-fits-all system, with a single low interest rate, enabling countries such as Italy, Spain, Portugal and Greece to live on a seemingly limitless sea of borrowed money. And now, entirely predictably, judgment day has come.

And the Australian comedy due Clarke and Dawe lay out Europe's current problem in laycomedian terms:

BRYAN DAWE: How much does Greece owe, Roger?

JOHN CLARKE: $367 billion.

BRYAN DAWE: Correct. And who do they owe it to?

JOHN CLARKE: Mostly to the other European economies.

BRYAN DAWE: Correct. How much does Ireland owe?

JOHN CLARKE: $865 billion.

BRYAN DAWE: Correct. Who do they owe it to?

JOHN CLARKE: Other European economies mostly.

BRYAN DAWE: Correct. How much does Spain and Italy owe?

JOHN CLARKE: $1 trillion each.

BRYAN DAWE: Correct. Who to?

JOHN CLARKE: Mainly France, Britain and Germany.

BRYAN DAWE: Correct. And how are Germany, France, Britain going Roger?

JOHN CLARKE: Well they're struggling a bit, aren't they?

BRYAN DAWE: Correct. Why?

JOHN CLARKE: Well 'cause they've lent all the vast amounts of money to other European economies that can't possibly pay them back.

BRYAN DAWE: Correct so what are they go to go have to do?

JOHN CLARKE: They're going to have to bail them out.

BRYAN DAWE: Correct. Where are they getting the money to do that Roger?

JOHN CLARKE: That is a good question. I don't know the answer to that one.

Tim Cavanaugh blogged back in February on the unfolding of the beginning of the drama of the potential collapse of the Euro.