The euro got a boost Thursday after the European Central Bank promised loans to shore up the finances of European banks, but the region's sovereign debt crisis is far from over. Investors are still afraid that Greece and other debt-burdened nations will collapse, bringing the entire eurozone down with them. Turning Europe into a common market with a single currency was supposed to increase choice and competition, lifting all the members' economies at once. Has the plan backfired, or can the euro still be saved?
The euro is broken beyond repair: The euro's birth 11 years ago "was the moment when the good magic of European integration turned evil," says Stephen King in the Irish Examiner. Using the same coins and bills was supposed to make former rivals into "natural business partners." Instead, it created a monster the political class wasn't equipped to handle. Now the euro is in "a permanent vegetative state." As leaders try one bailout remedy after another instead of pulling the plug, the euro will just die a slower death.
"Instead of bringing Europe closer together, the euro is driving us apart"
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It's not too late, but time is running out: Europe can still save itself, says The Economist, but it has to act fast. It needs to shift its focus from obsessive "budget-cutting" to fostering economic growth, and "shore up" Europe's banks so they'll survive if a country that owes them money defaults. Finally, Europe must identify the insolvent governments and build a "firewall around the solvent" ones, guaranteeing them "unlimited backing" while "restructuring the debt of those that can never repay it."
Europe can't save the euro... but China can: Saving Italy is essential, says Jeffrey Lewis at the International Business Times. And "seeing as Italy is still in favor with global investors," it could negotiate a "formidable" bailout from China to stay afloat long enough to get its debt problem under control. China, with huge reserves in U.S. dollars, has been looking for a way to diversify, so why not mitigate its overexposure and save Europe in the bargain?
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