Europe: Where economic sense and politics part ways

The Euro’s 11th Hour

By Steven Rattner, NYT

WITH each passing day, the noose around the neck of the euro zone grows tighter, with no indication that European leaders share any coherent vision for avoiding the hangman.

Instead of tackling structural problems, much of the endless chatter about the common currency centers on financial engineering: rescue funds, backstopping banks, printing money and the like.

At the heart of the European quandary is the conundrum that ideas that are economically sensible are not politically feasible, while ideas that are politically possible make little economic sense.

Topping the “must do” list is the need to fix the disastrous design flaw in which the 17 members agreed to a common monetary policy without coordinating their budgets and regulations.

(More here.)