Monday, May 10, 2010

FT's Gideon Rachman Actually Gets It

Well, there's at least one sensible person writing about the recent eurozone bailout over at the, and his name is Gideon Rachman:
Yet if Europeans do not accept austerity now, they will eventually be faced with something far more shocking – sovereign debt-defaults and collapsing banks. For many Europeans that is the kind of thing that only happens in Latin America. The discovery that Latin Europe – and maybe northern Europe, too – can also hit the financial wall will come as a horrible shock.
This weekend’s bail-out essentially extends one last, massive credit-line to those European governments that might need it. But, for all the talk of pan-European solidarity, one cost of this credit-line will be a sharp increase in political tensions within the EU. There is already much bitter talk in Greece about the loss of national sovereignty; matched only by bitter talk in Germany about the costs of bailing out feckless southern Europeans. Last week, I spoke to one much respected member of the EU establishment. He shook his head sorrowfully at the bitter recriminations between Greeks and Germans and the way the crisis has “set two peoples against each other”. This, he said, is as close as it comes to war in modern Europe.
Well done, Mr. Rachman, and keep it up or we might find out sooner rather than later how much closer to actual war in modern Europe things still can come.

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