Michael Boskin

The current financial crisis in Europe provides a unique update to Lenin’s dictum that nothing so destabilizes a country as a run on its currency. In today’s EU, nothing so destabilizes a currency union as a flight from a member’s sovereign debt. The turmoil from the Greek debt crisis and concern over analogous problems in Ireland, Portugal, Spain, and Italy have spread fears about the stability of European banks, the global financial system, the eurozone, and the global economy. German Chancellor Angela Merkel recently echoed these fears in public and added worries over whether the euro will survive the crisis.