For the socialists it comes down to this every time. All the big talk and demagoguery can’t mask the failure of their policies which boils down to creating junkies that can’t give up the fix in exchange for votes and power.
They can cut the Gordian knot by fixing Greece and the rest for real, but they won’t do it because they don’t want to go thru the withdrawal. And so the whole damn thing collapses and it’s 10X worse than it has to be. Game over and everyone loses.
They never learn.
In order to avoid what could be a catastrophic domino effect crash, don't be surprised that Germany--who has by far the most powerful economy in Europe--will suggest (and everyone has to accept) the following conditions:
1. The "safety net" social spending will have to be seriously cut back, and more emphasis placed on private long-term savings accounts for retirement and medical bill payments.
2. Taxation across Europe will have to be simplified drastically to encourage more savings and investment in Europe, not encourage liquid assets sitting in tax havens around the world. This means major overhauls of income tax laws with far lower tax rates combined with removing most (if not all) income tax loopholes and a lower-rate value-added tax (VAT).
Worldwide debt to GDP ratio is 69 percent.
Since global GDP is 74 trillion a year, that means the world is 50 trillion dollars in debt, or about 10k per person.
That gives a debt buffer of about 24 trillion. Global debt has doubled in 10 years.
The growth in the world economy was about 30 trillion dollars from 2000 to 2010, so the economic growth is still slightly outpacing debt and borrowing.