I wrote this post a day or so ago before the Greek prime minister was appointed. Today, Greece has a new PM and Italy is passing an austerity plan through the Senate. This will not change the reality of the European problem. Watching the new on APEC meeting in US strengthened my belief that the Pacific region holds the key for the next stage of global growth and Europe will be out of it for a while.
The recent public speeches made by Sarkozy, Jose Manuel Barroso, Angela Merkel, David Cameron and others show how deep runs the disagreement between various parts of Europe and its political leaders.
The problem of Greece and Italy are merely tactical when you look from a long term perspective. I am sure they will be resolved. Italy will adopt an austerity plan and Greece will nominate a prime minister. But the European problem, the problem of unity will not be solved. It will keep bubbling for a while until the big crisis will explode forcing major changes. No one knows exactly how that will look like, but one has a sense that Nordic countries and Great Britain will not want to be involved in this too much, Eastern Europe will stay rejected and sceptical on the sidelines and the South will be in turmoil. Who knows?
But the way moving forward is to fix the financial problem caused by high level of debt of Italy and Greece. Once that is achieved the rest of the world will adjust to the new reality and continue grow their commerce between North America, Asia, South America, Russia and Africa. Perhaps Eastern Europe will find ways to use its well educated workforce to explore other opportunities. Meanwhile, Europe risks fading away marred by internal fighting.
One thing is sure: Europe show will go on and surprise many.