Euro survives, this time. Dollar strengthens, for now.
The genesis of what is now the European Union was an economic agreement between six central European nations called the European Economic Community. The primary impetus was to discourage future wars between European nations. A common currency was not part of the original plan. From that simple plan it grew to what it was six months ago then declined to what it is today.
As it grew there was hope in much of the world that the € would replace the $ as the standard for international trade. Before Greece, call it 6 months BG, this looked like an imminent possibility. Bush ran our debt sky high and Obama has set us up for eventual bankruptcy. We have become dependant upon an adversary to support our debt and they were threatening to withdraw their support. Occasionally a tourist would report a refusal to accept the greenback in their travels. Then came Greece.
It had to happen. One can spend more than ones income and get away with it for a long time, a very long time if you are a nation and can raise taxes each time the next financial crunch occurs. But if spending is not controlled, the limit of what can be extracted from the people is eventually reached and that is when the fertilizer hits the circulator.
Germany has long been the economic strength of Europe and so it will remain for the foreseeable future. Greece has been what Greece is now for many generations and so it is likely to remain for the foreseeable future. As Walter Cronkite would put it, “It is the culture, stupid!” One cannot imagine a time when Greece would need to bail out Germany. Cultures do evolve, but evolution is a very long process. Random Thots recommends The Character of Nations by Angelo Codevilla for further insights on the subject.
We are always happy to rescue a neighbor in need due to no fault of his own, We will grumble, but still rescue a neighbor whose need was a predictable consequence of irresponsible self serving behavior, ,,,once. How many times will the nations of achievers be willing to bail out the nations of perpetual under achievement is yet to be determined.