Editorial: Europe's painful debt squeeze
People are seen through the window in an employment office, in Pamplona, northern Spain as they look at a list of jobs. The number of people looking for work in the 17 countries that use the euro hit its highest level since the currency was introduced back in 1999, official figures showed April 2, 2012 (photo: Jan. 27, 2012) Credit: AP
The measures European financial leaders keep taking to stem their debt crisis relieve fears in the United States, temporarily. That's all they can do, because the maladies of Greece, Italy, and the eurozone in general cannot be resolved without significantly disrupting the world economy.
The limits of relief cheap money from the European Central Bank can supply were again obvious last week when a government bond auction in Spain attracted too few buyers. Interest rates on Spain's debt leapt, and stock markets tumbled.
Investors are wise to realize some of these nations won't honor their debts. More defaults are coming, and hard times have just begun.
In a busy public square in Athens, a 77-year-old retired pharmacist shot himself in the head Tuesday. He left a note saying he could not face the prospect of being a burden to his child, or scavenging through garbage for food. Officials fear his death could become a rallying point in a nation where unemployment has topped 20 percent and the economy is in tatters.
Germany and the European Union demand austerity from broke nations. Austerity leads to contraction. Debt payments can't be made, and more austerity is demanded.
The people of Italy and Greece won't accept grinding poverty. The powers in the European Union won't allow the government spending that would prevent it. Until this conflict is resolved with finality, the world and U.S. economies will tremble.
