Europe is in many respects an economic never-never land. It has a central bank to run a coordinated monetary policy, and a single currency, but it has several dozen finance ministries pursuing separate fiscal policies, many of which can be summed up as: Spend, spend, spend. In fiscal terms, "Europe" is often a riderless horse.
Investors accept such shaky situations right up to the moment that, for whatever mysterious reason, they panic and decide the situation is unsustainable. And that's what has been happening over the past several weeks as the financial markets have been voicing a collective "eeek!" about the European debt and fiscal mess.
David Ignatius
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