Is the euro partly to blame for European NATO's inability to modernize their armed forces? Dale Franks thinks so:
The introduction of the Euro currency area has complicated this fiscal picture. In order to remain in the Euro area, member governments must keep budget deficits below 3% of GDP, or face fines as high as 0.5% GDP. This requirement tightens the fiscal straightjacket of many European nations. Even Germany, widely regarded as the most fiscally conservative Euro-area nation, is currently running a deficit of 2.8% of GDP. This means that increasing military spending through borrowing is simply not an option for most of the Euro-area nations.
A welfare state no one wants to trim, and a currency no one is allowed to inflate. Not even Houdini could get out of that trap.
Well, Europe might be catty and amoral, but at least they're useless.
"Well, Europe might be catty and amoral, but at least they're useless."
Wow! One of your best lines ever.
To be fair to the Europeans--even though it's not something I'm usually inclined to do--the problem is deeper than just the Euro. European governments have been running structural deficits for years, raising their Debt:GDP ratio higher than America's. Even without the Euro, they'd still be hard pressed to do much more deficit spending in order to modernize their militaries.
