To be sure, this may or may not be a fair prognostication – like God, dark energy and that story your buddy told you the other night at the bar, economic predictions are difficult to verify.
One of the reasons it’s been so hard to leave this story alone is the domino effect that a Greek default could trigger – i.e., defaults in other areas of the southern eurozone along with widespread pressure from northern countries (or at least their voters) to distance themselves from any further contagion. And just imagine the field-day Internet would have if the doomsday scenario of the collapse of the Euro came to pass.
It might even temporarily surpass cats with curtains (admittedly adorable) and skydive porn (sex and coke is so cliche) as the most clicked on story on the web. Though to be fair to Internet, cats and porn really don’t stand a chance of being superseded – nor probably should they.
Regarding the eurozone though, sanguinity might still be an option. Planet Money has been podcasting from Europe lately on the region’s sovereign debt crisis. And in Germany they seem to have found a crack in the doomsday argument. Though why Planet Money perpetuates the myth that any bailout violates the Maastricht Treaty is slightly baffling.*
For while no one enjoys bailing out profligate cousins, Germany – as opposed to the other ‘responsible’ northern states – carries a little something in its satchel that might force its hand to open up. History.
It turns out that even though they invented the word (and perhaps even the idea of) schadenfreude, they nevertheless still possess minds. And in those minds are lodged memories – or at least stories they’re told in school.
Guilt just may be a more powerful motive than punishment. And if it is, Germany will jump right in to rescue the sinking southern dingy. Whether their jump plugs the leak or simply adds more weight remains to be seen. The economy is a fickle fiend after all.
If Germany does luftwaffe in to save the day, they will likely have only one demand in return: would you please stop making jokes about the third Reich? Bitte?
Musing here on irony seems like a cheap trick. So it will be avoided. But then what about that one about the good Europe and the bad Europe…
* Despite a quasi ‘no bail-out clause’ by member states contained in Article 104 b, section 1, the Maastricht Treaty does expressly legitimize the bailing out of member states by the Council a few lines later in Article 103 a, section 2. “Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by exceptional occurrences beyond its control, the Council may, acting unanimously on a proposal from the Commission, grant, under certain conditions, Community financial assistance to the Member State concerned.” The treaty is downloadable in .pdf form from Eurotreaties. I’m not sure why Planet Money didn’t take a second to do a little googling on this one.