The Financial Times discussion board is on fire with today’s news. What I find utterly amazing is how many people still think they can salvage the Euro through stimulus spending. It was doomed from the start when they based it on an aggregate of members’ fiscal policies. There should have been an iron-clad, no-excuses-whatsoever policy that members commit to eternal balanced budgets with neutral-party auditing to ensure compliance. Unfortunately that would have ruled out have-your-cake-and-eat-it Socialism but it would have been the only way for the Grand Project (tm) to survive.
In the end the problem is cultural. In the U.S. We out of necessity had to develop a can-do, self-reliant culture: you cannot tame an unexplored continent any other way. The Euros haven’t had been faced with that for millenia.
Ruled out socialism? The Treaty of Lisbon imposes the “social market economy” on every member state whether in the eurozone or not, so that’s out of the question. The euro was set up to deliberately fail anyhow, as an excuse to grab more power; Bernard Connolly mentioned this in his book, quoting Romano Prodi.
That went out the door when Germany and France violated the standard in the early 2000s.