The End of Europe

Mike Shedlock

Steen Jakobsen, chief economist for Saxo Bank in Copenhagen, pinged me with a personal thought regarding Europe:

"I am just back from Italy and Russia and what really strikes me is how people have given up, and I mean totally given up. To my mind we are entering extremely difficult time where balancing EU, US debt and social tension makes for a black Swan event."

http://finance.townhall.com/columnists/ ... _of_europe

On his blog, Steen writes Time is Running Out for Europe

Time is running out for Europe

Steen Jakobsen
13 July 2011

The best way for me to describe the misery ahead for Greece and Europe would be to draw on my country Denmark’s dismal national football team. Much like Europe, it used to be 'somebody' - winning the European Championship in 1992, and beating the mighty Germany in the final. But since then, it has been mostly downhill again, very similar to Europe and its growth rates.

Today’s team is an awkward collection of sometimes useful veterans (though many are past their prime) and insufficiently seasoned young talent. Keeping our analogy running - in Europe the 'old' nations still seems to think they are on the top of the world and have some influence but every single country in Europe lacks job growth, economic growth and productivity, and is standing still at best. The up and comers, meanwhile, are insufficiently large to turn the overall tide.

Denmark is coached by a hero of Danish football’s glory days: Mr. Morten Olsen - five years ago his ideas where new and exciting, now the opponents know Denmark plays counterattack over the wings. In Europe, we know that every bump in the road will be met with liquidity instead of resolving the lacking solvency. The playbook for EU remains the same: pretend there is no problem and it will go away. There is always the next game or the one after that. Where is risk willingness, the support a new approach and new players?

So now Denmark’s football team and the EU have a final chance: change now or risk a serious defeat. The stakes for Danish football are relatively high – a missed chance at participating in the European Cup in 2012 and possibly the World Cup in 2014 – the stakes for Europe are even higher – a risk of disorderly collapse.

Europe is close to losing a generation of youth in Spain, Ireland, Portugal and Italy, with between 20 and 45 per cent youth unemployment. To avoid losing this generation, European politicians and the ECB need to come up with a radically new game plan.

First, we need to stop pretending we can dance around the word “defaultâ€