For the Eurozone, It’s Apocalypse Never by Michael Hirsch of the National Journal. Greece may tumble, but the dominos will not fall or bring down the eurozone, according to a veteran American reporter. He pushes back against the nay-saying about the euro's fate, arguing that the stakes are so high for Europeans that they will embrace previously-unthinkable degrees of federalism rather than let the EU crumble. Recommended by European Affairs (10/6)
If German parliamentarians had said “no” this morning, the EU plan to increase its war fund to defend Greece’s credit would have been vetoed. Governments’ collective efforts around the world to save the euro would have hit a juddering crash and crack-up, with tsunami-like ripple effects on the global economy. That prospect seemed very alive only last weekend, driving down the euro’s value and stock prices.
The head of the European Commission, José Manuel Barroso, delivered a challenging “state of the union” speech for the EU warning that the union faces the toughest challenge in its half-century history, which he said can only be met by member states agreeing to be more integrated in the way they run their finances.
Fears have spread through markets and finance ministries that the debt burdens and other problems in the eurozone could help plunge the world into a global recession.
With Washington now publicly engaging with European governments on these issues, a cogent analysis of the stakes for the U.S. and the limits of leverage for the Obama administration in promoting solutions appeared on NPR, the national U.S. public radio network.
Nervousness about a possible default on Greek debt visibly rippled throughout Europe last week. Calm returned, at least temporarily, after a meeting of eurozone finance ministers Friday, attended by Treasury Secretary Timothy Geithner – the first time a U.S. Treasury Secretary has participated in this kind of a eurozone ministerial meeting. In an interview earlier this week Geithner said, “I think they [European leaders] recognize they’re going to have to do more to earn the confidence of the world.”
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