Collectivist international currency prevents healthy regional growth
It has come to this. A year after rescuing Greece from default, Europe is staring into the abyss. The bailout has proved insufficient. Greece needs more money, and it can’t borrow from private markets where it faces interest rates as high as 25 percent. But Europe’s governments are reluctant to advance more funds unless other lenders — banks, bondholders — absorb some losses by writing down their debts. This, however, would constitute a default, risking a broader banking crisis that might torpedo Europe’s fragile recovery in France, Germany and elsewhere. There is no easy escape.
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Just how long this grinding process can continue is unclear. In Spain, the incumbent socialist party lost big in recent elections. Popular unrest persists in Greece amid signs — reports The Washington Post’s Anthony Faiola — of a “resurgence of an anarchist movement” there and elsewhere.