Will the problems of Portugal, Greece and Spain result in the break up of the European Union?
According to BusinessWeek, that certainly seems to be the suggestion of Societe Generale SA strategist Albert Edwards. Edwards says that even if European governments cut their spending and slashed deficits, "the lack of competitiveness within the euro zone needs years of relative (and probably given the outlook elsewhere, absolute) deflation. Any help given to Greece merely delays the inevitable break-up of the euro zone."
BusinessWeek reports that Tommaso Padoa-Schioppa, a former European Central Bank executive board member and Italian finance minister, says there is no chance of that happening.
But as the New York Times suggest, this could go either two ways and a lot of it will come down to political will.
Europe might emerge with more tightly coordinated economic policies to avert crises like the one brought on by Greece. But that will require a consensus, which is hard in a place where there are so many different economies and agendas. But if it doesn't happen, Europe's power will decline.
And as Liz Alderman from the New York Times suggests, the signs are not looking good.
"Already, some of the small Baltic nations that had been clamoring to get into the euro club are having second thoughts. And if Britons were wary of adopting the euro before, they must surely be nursing a silent schadenfreude as they watch Germany and France scramble to clean up after Greece. Don't expect them to change their minds any time soon."
no comment untill now