Steven Pearlstein: Greek crisis exposes cracks in Europe's foundation
By Steven Pearlstein
WashPost
Friday, May 7, 2010
It is easy to dismiss Thursday's 30-minute, 1,000-point boomerang on the Dow Jones industrial average as a freak event that resulted when everyday human error collided with high-speed, high-volume computerized trading.
But it should not be forgotten that that the whole thing was triggered when traders around the world simultaneously pushed the "sell" button as they watched live video of baton-wielding riot police wading into a crowd gathered outside the parliament in Athens to protest the passage of austerity measures foisted upon their government by their European neighbors and creditors.
Even after technical glitches were suspected and the trades were unwound, however, the markets and the world confronted the precarious state of the 60-year effort to create a single economy and a unified political system out of Europe's once-warring countries. The Dow has already fallen more than 600 points in three days on fears that a European debt and banking crisis could drag the continent's economy back into recession and put the entire European project in jeopardy.
This project has created a massive new bureaucracy in Brussels, a much-ignored new political apparatus in Strasbourg and a central bank in Frankfurt that continues to reflect the Germanic fear of easy money. After the Berlin Wall fell, the once-communist countries to the east were gradually incorporated into the union. And under the financial umbrella of the euro, the smaller, poorer countries at the periphery found they could borrow and attract enough capital to bootstrap themselves into the ranks of wealthy nations.
(More here.)
WashPost
Friday, May 7, 2010
It is easy to dismiss Thursday's 30-minute, 1,000-point boomerang on the Dow Jones industrial average as a freak event that resulted when everyday human error collided with high-speed, high-volume computerized trading.
But it should not be forgotten that that the whole thing was triggered when traders around the world simultaneously pushed the "sell" button as they watched live video of baton-wielding riot police wading into a crowd gathered outside the parliament in Athens to protest the passage of austerity measures foisted upon their government by their European neighbors and creditors.
Even after technical glitches were suspected and the trades were unwound, however, the markets and the world confronted the precarious state of the 60-year effort to create a single economy and a unified political system out of Europe's once-warring countries. The Dow has already fallen more than 600 points in three days on fears that a European debt and banking crisis could drag the continent's economy back into recession and put the entire European project in jeopardy.
This project has created a massive new bureaucracy in Brussels, a much-ignored new political apparatus in Strasbourg and a central bank in Frankfurt that continues to reflect the Germanic fear of easy money. After the Berlin Wall fell, the once-communist countries to the east were gradually incorporated into the union. And under the financial umbrella of the euro, the smaller, poorer countries at the periphery found they could borrow and attract enough capital to bootstrap themselves into the ranks of wealthy nations.
(More here.)
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