Euro crisis

After last week’s decisive EU summit (the 20th of its kind), and after the German parliament’s support for the latest bailout plans, the euro is saved! Again. The usual sigh of relief was heard at bourses across the continent, and once more politicians congratulated themselves on their historic achievements.

For a committed market liberal it was a strange experience. There I was hoping for an election victory of the radical Syriza party in Greece’s general election. Yes, the very party that rejects austerity and claims that unreformed socialism provides the answer to the country’s problems.

Continuing the Target 2 madness prevents the long overdue adjustment of intra-European trade and payment balances. It locks both PIIGS and GNFL countries into a monetary system that works for neither. If Europeans only understood half the severity of this problem, there would be a revolution tomorrow morning. For the time being, however, the European soccer cup provides a most welcome distraction.

If newspaper reports last weekend are to be believed, Germany is pressuring Spain to accept a European bailout. The story is all the more credible as the Spanish government has strongly denied any such bullying. Veteran Euro crisis observers remember that Ireland’s bailout began in precisely the same way.

Analysing the link between the Holocaust and the European crisis is far more interesting than solving the crisis. At least if you are German. While the rest of the continent is tumbling towards the monetary abyss, it seems the Germans would rather conduct another debate about their historical guilt.

Does Europe’s crisis have the potential to derail the Australian economy? How can the European crisis spread to Australia? And are there opportunities for Australia amid the European catastrophe?

Economically, whatever happens in Ireland will not be decisive for the future of the euro. That is more likely being decided in Berlin, Frankfurt, Paris, Athens and Lisbon. But to the rest of Europe watching the farcical march towards a pseudo-referendum on a pseudo-significant agreement, it is a reminder of the anti-democratic tendencies of the EU.

The European crisis we have been witnessing from afar for the past three years is not an ordinary recession. It is not even an ordinary depression. In fact, it is not even an ordinary economic crisis.