Bailout Only Postpones Default

Washington Post: The problem with the European package is that it postpones problems rather than resolves them. It will delay Eurobond defaults another year or two, and it will add some fiscal discipline that could eventually make the 16 eurozone nations operate more like one economy. But there’s nothing to address the deeper structural imbalances between high-saving northern Europe and the spendthrift “Club Med” countries of southern Europe that used the euro as a credit card. Basically, the north’s abundance created a low-interest Eurobond market that underpriced the risk of investments in the south. ———- The Euro is flawed precisely because of all the differences between the members. In this case diversity is not working out to well. The debts are so large that they cannot be paid back …