The Danger of Economic Collapse in Europe

No one in the punditocracy has raised the issue yet, but their are drastic dangers in the collapse of the Eurozone in Europe. The European Union (EU) voted an austerity rescue package for Ireland and Dublin accepted it. It then voted one for Greece, and Athens accepted it, but with the proviso of first holding a referendum on it. Commentators have even come up with an acronym for the danger of a Southern European collapse: PIGS--Portugal, Italy, Greece and Spain. If any of the three other PIGS defaults then Europe will be plunged into a depression, the Euro will collapse, and the effect will likely be felt across the Atlantic in America. Go here for a timeline of the debt crisis as it developed from late 2009 to the present. Go here for an article on the dangers of Italian default on their debt.

This is then the opposite of the Great Depression of the 1930s when the depression began on Wall St. and very quickly moved across the Atlantic to Europe and South Africa. America was providing the financing for the system of revolving finance in which America loaned money to Germany, which then paid that same money to the Allies as reparations for World War I, and then the Allies repaid American war loans. Once America could no longer provide the funding to Germany the system collapsed.

What is at Stake?

During the Cold War from the outset the United States had strategic and economic interests throughout the Third World. For anyone who doesn't already realize it there are few democracies in the Third World. We found ourselves supporting a bunch of unsavory characters against another bunch of similar characters throughout Latin America, Africa, and the Middle East. Franklin Roosevelt once famously said of the dictator of Nicaragua, "He's a son of a bitch, but he's our son of a bitch!" This logic was soon transferred from Central America to Africa and the Middle East. We supported royalists against populists and Communists. Then we supported colonial powers against Soviet-backed local players striving for liberation. After the wave of decolonization in the 1960s we were at least spared from that embarrassment again. In the Angolan civil war the main difference between the three liberation movements that fought each other was their ethnic affiliation and the Portuguese word that they used for comrade as a greeting.

But that could be justified in terms of keeping the Free World free. Since the end of the Cold War we have been faced in the Muslim Middle East with secular national socialists (Ba'athists, pan-Arabists) and fundamentalist Islamists. It was announced on CNN on Wed. evening that the anti-Gaddafi forces in Libya consisted of only about a thousand "warriors" with little military experience or expertise. To win they will require major training and arms supplies. Before we attempt to turn them into the next Northern Alliance, we should be sure that they are better than the last lot.

I can well imagine aspiring foreign policy advisers sitting the following exam for their license. The exam question is: The Spanish inquisition has just gone to war against Fascist Italy. We are not at war with either. Whom should we support? Discuss and bring examples from American history.