We're in trouble. I'm saying this for quite some time now. Certainly I feel like being in trouble after watching part of my money melt at 0.3% the hour today. Was a hell of a lot of fun !
.. Europeans are great at compromise. We can get 17 parties at a table with 17 different opinions and walk out pretending that the found solution, while not the best, is good enough. According to U.S. media we live in paradise.
And in many respects we are. But sometimes every now and then there's a problem that cannot be solved with compromise.
.. The U.S. debt crisis is not such a problem. All parties agree that debt has to be reduced and the question is just what has to be cut and what (whether, lol) taxes have to be raised. You can find any compromise here and it's (comparatively) ok. Sure, if you don't do anything you obliterate yourself, but anything else is (kind of) a solution.
The European debt crisis is different. There are two opposed positions and a third way that is the 'compromise'. Unfortunately, that third way is by far the worst. Not just for Europe, but every single human on this planet.
Solution #1 is to create a European Super-state; most powerful economic zone on Earth. Sounds great - but not everybody likes that. It means that Germans have to pay for Greek debt. And there are a lot of institutional problems to be solved. We need some kind of constitution, right? Future moral hazard has to be prevented. We would need to have elections.
Getting something like this right is not easy and it does take a lot of time, even if all parties agreed. Of course, they don't. And we don't have time.
Solution #2 is to split the Euro Zone up again. This is a bit easier to do from an institutional point of view. Unfortunately, it also means that a lot of banks go bankrupt and this would probably lead to a world-wide second great depression. But at least this process could be organized.
And then there's the compromise: We chain ourselves together and at the same time split up ... yeah, right.
Now, this is just as bad as doing nothing! The parliaments of countries like Germany, Netherlands, Austria or Finland might soon not allow their governments to spend the peoples' money at the necessary rate to save Greece, Portugal, Ireland, Spain or Italy. And if that happens we have numerous unorganized bankruptcies. This will also lead to a second great depression. Just that we would probably have to invent a new name for this kind of crisis.
Right now, we are going straight for the third way; the holy compromise. But not all problems can be solved by compromise .. We need a tea party: a party that somehow manages to push the own agenda through - any agenda - in a totally undemocratic way.