As I wrote on June 19, the Eurozone is a wreck, and Greece, which has since announced it will leave the EU on January 1, 2013, can’t even afford to pay attention. Spain is in trouble, Italy is swimming in debt, and other members of the EU are wondering when, if ever, they will be able to get their spending and expenses under control.
One result of this has been increased demand on Germany, the solvent nation in the midst of the EU chaos. Because of her solvency, she has become the teat at which the debt-ridden EU countries are trying to feed.
Another result has been the recent formation of the European Financial Stability Facility to serve as the central financial supervisory body for the EU. While the main job of this facility is to “aid banks directly without adding to government debt,” there are reasonable questions about how one EU financial office will be able to oversee bailouts (for all intents and purposes) without continuing to add to the massive debt already overtaking countries there.
I can only say that watching the EU try to salvage their financial future without significantly cutting many of their cradle-to-grave benefits is like listening to President Obama promise to reduce our nearly $20 trillion in debt while simultaneously ramming Obamacare down our throats.
In fact, my guess is that the European Financial Stability Facility and Obamcare have one main thing in common–both will be wildly popular for a time, then the euphoria will wear off and someone will have to foot the bill.