The Euro Genie

In general, Europeans don’t have a spectacular record of getting along with each other.  The two most devastating wars mankind has known started between European neighbors during the century just passed, and they have endured many other horrific conflicts as well.  Obviously this is not news to the people living there and an economic union of sorts for that continent was proposed soon after the end of the Second World War.  It has evolved over the sixty-plus years into a union of independent states all using a common currency, the control of which is separate from any of them.  This currency, the Euro, is now a thirteen year old political project still hoping to tie the nations of Europe together so tightly that a Third World War cannot take place between them.

The current European dilemma revolves around difficulties enforcing prudent fiscal management by these member states when they all share the fiscal cost of borrowing but lack a political union to enforce prudent budgetary standards.  Thus we have come to a point where some nations borrowed way more than others on a per capita basis and really have no way of paying the loans off by themselves.  Understandably, those countries who didn’t borrow to such excess are loath to now accept the burden of repayment for the sins of those who did.

Established to prevent the potential devastation another war could wreak, the European Union may be coming apart.  A recent report from Bank of America estimated the decline in global stock markets caused by the problems Greece is having with their share of the debt burden led to a loss of almost three trillion dollars just in May of this year.  Other member nations are also in serious trouble to varying degrees, including Ireland, Portugal, Cyprus, and now both Spain and Italy.  Saving the union will require something as miraculous as pulling a genie out of the bottle and many economists are now voicing doubt the Euro will be able to exist in its current state.

There has been substantial discussion of late about how a solution is to be structured.  All the parties involved are hoping to find some way to conjure up a solution.  Can any of them uncover an almost magical solution?  Where will the genie’s miraculous bottle be found, how should it be rubbed, where should it be kept, and especially, who gets to do the rubbing.  The problem is, when all of that gets decided, there is just no way to guarantee what kind of genie will come boiling out.  Tradition says Allah created them out of smokeless fire.  That practically guarantees somebody is going to get burnt.