Brendan Keenan: Euro dream needs a dose of reality
Implementing new, tough policies may be unpalatable, but the euro area will not survive another meltdown
EVEN as the EU cavalry charged -- or, rather, trotted -- to the Greek rescue, the cannons were swivelling to a new target. The cost of Portuguese government debt rose sharply on the markets, while that of Greece reached levels one thought had gone out with flared trousers.
We have a problem. It is not just a Greek problem either; as the German economics minister plaintively tried to explain to a furious German public. The European taxpayer, no more than the Irish or American one, cannot afford another banking crash.
This alarming fact was highlighted again by the International Monetary Fund (IMF) in its twice-yearly look at the global economy last week. Governments are borrowing vast amounts of money to contain the effects of the 2008 financial crash. They are stretching their budget to the limit. A second financial crash, were it to occur, would more or less have to take its destructive course.