The U.S. joins the euro zone

Greece, with a GDP the size of greater Dallas–Fort Worth, has sent shockwaves from China to the U.S. Like it or not, we're in the euro zone now.

Robert Shrum

The fearful dance of the Dow with the Greece-plagued euro points to a new reality that could either warrant or undo the Keynesian recovery of the U.S. economy: We’re all in the euro zone now. What happens in a relatively small European country—and the possible replays and reactions among its neighbors—could drive Europe back into recession and take the Unites States along for a downward ride.

This is the result of Europe’s continent-wide common currency, driven more by political will than sound economics, which prevents nations from devaluing their way out of trouble as they have in the past. Banks and investors treated the sovereign debt of Greece as if it were only a little less secure than German bonds. After all, isn’t the euro as sound as the deutsche mark it replaced—and don’t Berlin and Paris have to make sure it stays that way, from Lisbon in the west to Nicosia in the east?

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Robert Shrum has been a senior adviser to the Gore 2000 presidential campaign, the campaign of Israeli Prime Minister Ehud Barak, and the British Labour Party. In addition to being the chief strategist for the 2004 Kerry-Edwards campaign, Shrum has advised thirty winning U.S. Senate campaigns; eight winning campaigns for governor; mayors of New York, Los Angeles, Chicago, Philadelphia, and other major cities; and the Democratic Leader of the U.S. House of Representatives. Shrum's writing has appeared in the Los Angeles Times, The New York Times, The New Republic, Slate, and other publications. The author of No Excuses: Concessions of a Serial Campaigner (Simon and Schuster), he is currently a Senior Fellow at New York University's Wagner School of Public Service.