March 29, 2012
Vulnerable Europe Still on the Brink
Michael Boskin, Project Syndicate
With the likelihood of a contagious sovereign-debt implosion and European bank failures greatly reduced by the Greek debt deal and the European Central Bank’s lending program, it is time to look ahead. Where do the European Union, the eurozone, and the EU’s highly indebted countries go from here? Will Europe be able to roll back its welfare states’ biggest excesses without economic distress and social unrest toppling governments and, in the peripheral countries, undermining already-tenuous agreements with creditors?
Some good news globally will have an impact on how these questions are resolved. The United States’ economy is gradually reviving, albeit slowly by the standards of recovery from a deep recession. China, Brazil, and India have not decoupled from their...