Israel's Financial Expert, which I wish would post more frequently, has a superb read from last summer on the debt crisis in Greece. If you wish to understand what is happening and will develop in Iberia in the next few months, just click here. Then use the "find/replace" feature on your browser to substitute "Portugal" for wherever it reads "Greece."
The history, of course, is not exactly the same, but the underlying problems are.
According to the Financial Times or Bloomberg the challenge stressed EU economies face right now is increasing bond yields, making the servicing of debt near impossible. But the real problem is a perception of government problem- bond yields are just a symptom. Generations of socialist thought have polluted the governance of these countries and created a class of citizenry which views the state as the sole creator of wealth. Not only is this ill-reasonedbecause the state cannot create, it can only redistribute wealth, it is problematic because it discourages individual innovation and foreign investment.
Once again this is evidence that while the US economy is in serious trouble, America's traditional "everyman for himself" approach could be our salvation.
Sensible libertarian views on nearly everything- except foreign affairs.