Skip to main content

995e9a0046f86fa80b593304_ms7262c.jpg

Time to Constrain Government

The EU is currently providing a unique update to Lenin’s dictum that nothing so destabilizes a country as a run on its currency. But the fiscal problems that triggered the crisis are not limited to Greece – or even to the other countries on the eurozone’s periphery – and can be solved only by placing constitutional restrictions on legislators' budgeting authority.

PALO ALTO –The current financial crisis in Europe providesa unique update to Lenin’s dictum that nothing so destabilizes a country as a run on its currency. In today’s EU, nothing so destabilizes a currency union as a flight from a member’s sovereign debt.

The turmoil from the Greek debt crisis and concern over analogous problems in Ireland, Portugal, Spain, and Italy have spread fears about the stability of European banks, the global financial system, the eurozone, and the global economy. German Chancellor Angela Merkel recently echoed these fears in public and added worries over whether the euro will survive the crisis.

The €750 billion (almost $1 trillion) bailout package from the EU, the European Central Bank, and the International Monetary Fund provided only a brief respite in international markets. This has now given way to a more sober analysis of the crisis and the efficacy of the response.

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.

Subscribe

Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.

https://prosyn.org/IARAnx9;
  1. bildt69_DELIL SOULEIMANAFP via Getty Images_syriansoldiermissilegun Delil Souleiman/AFP/Getty Images

    Time to Bite the Bullet in Syria

    Carl Bildt

    US President Donald Trump's impulsive decision to pull American troops out of northern Syria and allow Turkey to launch a military campaign against the Kurds there has proved utterly disastrous. But a crisis was already inevitable, given the realities on the ground and the absence of a coherent US or Western policy in Syria.

    8

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated Cookie policy, Privacy policy and Terms & Conditions