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Monday, February 15, 2010

European Union On the Brink Of collapse

This article heralds the possible demise of the EU while country's (especially poorer ones) were happy to share in the prosperity of the EU. Now that the global economic depression is widening the crack in the tenuous relationships of the EU country's. Either the EU Will have to cast off it's weaker sisters and brothers creating a distinct rift between the already beleaguered eastern EU country's and the more prosperous.

This basically says that to paraphrase Benjamen Franklin, "we must all hang together or most assuredly we will hang separately. Even the possibility of a break up of even a single country would have disastrous consequences not only for the EU but for the world.

The immediate problem: the entire country of Greece is about to go bankrupt. They've got overly generous pensions and benefits, they've displayed a seemingly petulant unwillingness to consider belt-tightening, and their government sector is veritably Italian in its efficiency and size. This is not the stuff that long-term economic health is made of.

The bigger problem: Greece is part of the Eurozone and, while its long been kind of funny to refer to them as the "honorary member," the other 15 countries who share the Euro aren't amused. The bankruptcy of any individual state would tank the shared currency, cascading across the continent in ways that are totally unpredictable (the upshot of a disaster which was never even a consideration when the Eurozone was formed). If it did happen, most of what we've thought about travel for the last decade—dollar vs. Euro, the long-term stability of the EU, frictionless travel across Europe, etc—would quickly have to be revised.

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