European Unity Is Burning: Can the U.S. Avoid Contagion?


The latest grumblings of a Greek default began on Friday, sprouted over the weekend, and were in full bloom by this morning, as Europe's ruling elite once again seem unwilling and/or incapable of containing their debt crisis - even with the added oomph of the G-7 chiming in.

It's the most glaring example of failing to control contagion since the Black Plague decimated one-third of the European population in the 14th century.

Attempts to bury this two-year old story have so far proven fruitless, as every effort to keep Greece from becoming the Lehman Brothers of Europe has yet to gain any credibility. Despite arguments to the contrary, Macke and I both agree that Greece will not only default, but must default in order to catalyze a response that's big enough to assure the region and the world that the European Union is here to stay. Essentially the EU is working to prove that they're in it to win it (cue the Bluto "Who's with me?" speech from Animal House here).

Macke eloquently distills the crisis, saying "at some point it becomes very simple; the Germans are balking." To be more precise, German citizens have long been skeptical of subsidizing the cafe life of 50-year old Greek pensioners in overwhelming numbers, but that public distaste is getting harder to ignore by the ruling elite. In fact, just this weekend, Chancellor Angela Merkel's party suffered a regional election setback and is expected to face another rebuke when Berlin votes this coming weekend.

At this point we're all fed up with the European debt crisis and its mind-numbing array of twists and turns. We have enough of our own problems, thank you, can't you please just make yours go away?

Bottom line: Whether or not Greece defaults is not the issue that matters. As Macke stated, Greece is the Lehman of Europe. It's the contagion, stupid! That's what matters most now as financial markets across the globe try to price in the impact.

View Comments (83)