Why the Eurozone Could Unravel Shockingly Fast

Last week, I attended an informal seminar on the outlook for the euro given by the Foreign Policy Research Institute. Two knowledgeable and thoughtful experts analyzed the current woes and historical flaws of the European Union and the common euro currency. The small, sophisticated audience asked sharp questions in response: How would a Greek exit from the euro zone be managed? What was being done to improve labor market flexibility in Italy? And what would today’s crisis mean to the potential enlargement of the E.U. to Turkey and beyond? As I sat listening, it occurred to me that all such policy discussions presuppose that there is in fact a policy to discuss. The real problem facing the euro zone, however, is that there is no longer any such policy, no overall strategy, no big picture.