As Paul Krugman writes in Europe's Great Illusion New York Times 07/01/2012:
... the prospect of disaster, no matter how obvious, is no guarantee that nations will do what it takes to avoid that disaster. And this is especially true when pride and prejudice make leaders unwilling to see what should be obvious.Tags: austerity economics, eu, euro, european union, france, françois hollande
Which brings me back to Europe’s still extremely dire economic situation. ...
To read the latest reports from European-based “expert” institutions, like the one released last week by the Bank for International Settlements, is to feel that you’ve entered an alternative universe, one in which neither the lessons of history nor the laws of arithmetic apply — a universe in which austerity would still work if only everyone had faith, and in which everyone can cut spending at the same time without producing a depression.
So will Europe save itself? The stakes are very high, and Europe’s leaders are, by and large, neither evil nor stupid. But the same could be said, believe it or not, about Europe’s leaders in 1914. We can only hope that this time is different.