Europe: time to start devising a "Plan B"

Europe's downward economic and political spiral

Desmond Lachman 

The clearest of fault lines are now appearing in Europe's single currency project that has to cast doubt upon the long-run survivability of the Euro in its present form. For not only does the European fiscal austerity pact appear to be driving the European periphery into an ever more serious downward economic spiral, poor economics across Europe are undermining the European political center's authority to pursue coherent policies.

Increased political change in the European periphery is also now starting to exacerbate Europe's economic downturn by making it difficult to govern, and by heightening market uncertainty about the periphery's political ability to stay the course. Sadly, there appears to be nothing on the European horizon that offers hope that this economic and political downward spiral is soon to be arrested.

Read more: www.aei.org