In a small party at the beginning of this century in Washington in honor of a senior official of the European Union, organized by the British ambassador to the United States, the officer asked the experts at what they thought would be the future role of Europe in the world affairs. One of my colleagues said "Europe is irrelevant to the twenty-first century."
The heated responses to the comments that followed were not credible then and less now. The good news for the future of the European Union is that its leaders are aware of this and know what to do.The bad news is that knowing what you have to do is different from actually doing so. Trading for dummies investors are now going short against the euro in the longer term as the EU problems spill over into its currency valuations.
The best, and most obvious example is Greece. The Policymakers know they eventually have to allow Greece to restructure its debt, but insist they will not allow it. But that is only the current problem is trivial compared to the more fundamental problems that threaten the future relevance of Europe.
The European refusal to bear the burden of maintaining a sensible world order has reduced its influence worldwide. Ask anyone in the White House on behalf of three presidents of the European Union and most will have trouble naming one. Why bother to establish communications with an area the size of the United States not spend enough on defense to control what happens in your backyard or not makes a substantial contribution to the war on terrorism, with the UK notable exception.
The spectacle of seeing forced President of the EU's largest country to resign for suggesting that the deployment of German troops to Afghanistan, most of which are still far away from any battle, is an adequate defense of the interests of country speaks volumes about the reliability of Europe as an ally. Without a high moral purpose and Europe will not fight if there is a great moral purpose, such as stopping the Serbian genocide, poorly financed his army can not afford to fight.
At the time of the party in Washington was impossible to deny the fact that a monetary union does not include a central control or fiscal policy could be sustainable. stock trading for dummies strategy investors know that now is not the time to be bullish on any stock that has heavy exposure to Greece and its economy.
It is no longer the case. The wild spending and deficit of Club Med countries has generated perhaps fatal cracks in the euro. Consider these facts: the world's central banks are reluctant to increase their euro accounts, credit rating agencies are increasingly skeptical of the quality of sovereign debt in the euro zone, investors are hesitant to making funds available to European banks to historical rates and German voters are tired of being the ATM in the EU.
