The basic problem is that many people won’t keep their euros in a Greek bank, and perhaps not in a Spanish bank, either, when those euros can be moved to Germany or some other haven.
Yet German citizens do not appear ready to guarantee Spanish banks or, by extension, the whole credit system of Spain and the other periphery nations. Guarantees of that scope are probably impossible and may also require constitutional changes in some nations.
We thus face the danger that the euro, the world’s No. 2 reserve currency, could implode. Such an event wouldn’t be just another depreciation or collapse of a currency peg; instead, it would mean that one of the world’s major economic units doesn’t work as currently constituted.
“The final lesson of this debacle is that smart nations with noble motives can make very big mistakes….”
Amen and amen.
[blockquote]We are realizing just how much international economic order depends on the role of a dominant country — sometimes known as a hegemon — that sets clear rules and accepts some responsibility for the consequences. For historical reasons, Germany isn’t up to playing the role formerly held by Britain and, to some extent, still held today by the United States. (But when it comes to the euro zone, the United States is on the sidelines.)[/blockquote]
Those with longer memories will remember the Sterling Area. We got into a similar pickle when we tied the pound to fixed exchange rates with Commonwealth countries and dominions after we came off the Gold Standard. We in effect became the guarantor of a trans-national currency, and the effect on us was disasterous. We could not devalue unilaterally and maintain the Area, and we became structurally uncompetitive.
We had to exit it in haste and in considerable pain opening the way to involvement in Europe and there were a series of devaluations and huge economic disruption that we only really started coming out of in the late 80’s.
With the Exchange Rate Mechanism, we again flirted with fixed exchange rates with the idea of joining the Euro. Again we had to retire wounded.
Now people are asking the Germans or North Europeans to get into the same situation with the Euro, acting a banker to a continent.
Those who do not remember their history are condemned to repeat it.
I suppose that since this article is on T19, the question arises: What is Christian response to all this?
As individuals there is little we can do to influence events, though we can armchair comment with our wisdom on weblogs. The reality is that we are being swept over by events over which we have little control, save in our daily lives and our relationships with others. As structures and institutions strain and perhaps fail, what is left?
We as church remain. As money for services dries up, as needs go unmet, as people suffer, and as on a small level we can see needs which perhaps can be met, we as church, perhaps as the ‘last man standing’ can perhaps have an opportunity to come into our own, following the example of the man from Galilee, and in His service. We as church have a powerful opportunity to help and perhaps in doing so to give a powerful witness to others of what the love of Christ means. But most of all we have the opportunity to be commisssioned for that service and in the power which comes from Him in prayer.
We churches of the “Katrina disaster of 2005” know pretty well the role of the Church in an epic disaster. Being the good Samaritan of the Gospel is most important. But preaching the whole of Scripture [since Jesus was the fulfillment of the Law and Prophets] is also important and brings us to the sticky issues of personal responsibility and moral accountability. The Greeks made their beds and are going to suffer the consequences of that. The same forces are at work in the U.S., and unless we repent and turn to a new track we may be doomed to follow Greece into the abyss.
So, the Church’s place [and a Christian’s duty] is to be a place of comfort, hope, and reality; the reality being that Salvation is through faith in Christ.