Guus Bosman

These are uncertain times for the European Union. Last week Paul Krugman wrote an article in the New York Times about the problems facing the Union and the euro, and the possible scenarios that could unfold. A few days later The Economist argued that Greece and possibly Ireland and Portugal should restructure their debts, the first rich-country sovereign defaults since 1948:

"This mess leads to a depressing conclusion: Europe’s bail-out strategy, designed to calm financial markets and place a firewall between the euro zone’s periphery and its centre, is failing. Investors are becoming more, not less, nervous, and the crisis is spreading. Plan A, based on postponing the restructuring of Europe’s struggling countries, was worth trying: it has bought some time. But it is no longer working. Restructuring now is more clearly affordable than it was last year. It is also surely cheaper for everybody than it will be in a few years’ time. Hence the need for Plan B."