European Union

The U.S. economy might be on the verge of a double-dip recession, while Europe is paralyzed by a massive debt crisis afflicting the governments on the periphery of the eurozone. Alarming as they are, both of these stories are just part of an even gloomier overall economic picture of the West.

A spectre is haunting Europe​—​the spectre of the disintegration of the eurozone. All the powers of old Europe have entered into a holy alliance to exorcize this spectre: German chancellor and French president, the Brussels eurocracy and the bonus-laden bankers. Let the ruling classes tremble. The debtors have nothing to lose but their burdens.

Late last month, EU Home Affairs commissioner Cecilia Malmström announced the resumption of the Terrorist Finance Tracking Program (TFTP), under which American counterterror investigators have consulted and analyzed selected data on international bank transactions originating in Europe. (Note that it was not the Obama administration that announced the resumption of the program.)

The widespread condemnation Europeans have expressed toward Israel after its commandos boarded the so-called peace flotilla on May 31 - and used force only when threatened with death - signals a desire to turn every Israeli action of self-defense into absolution for the crimes of the Holocaust.

On Tuesday, one day after Israeli commandos raided a supposedly “humanitarian” flotilla headed for the Gaza Strip, Israeli Ambassador to the EU Ran Curiel appeared before the European Parliament’s Foreign Affairs Committee in what would become a raucous session. Even before Curiel had the chance to speak, representatives of one parliamentary group after another took the floor to condemn Israel's action.

The Narcissism
of Minor Differences

Madrid

THIS IS THE SEASON of high-level international meetings and, therefore, the season of many discontents. Europe's concerns about the fall of the dollar and America's fiscal profligacy were aired at the World Economic Forum in Davos last week, as were America's concerns about the inability of Europe's governments to stimulate domestic demand. The Europeans are watching their export industries suffer as the euro soars, and the value of the dollars their companies' U.S. subsidiaries earn drop like a stone, as the Euro appreciates to some 50 percent above its previous low.

WE WERE TAUGHT in graduate economics classes that if a country runs large and persistent trade deficits, the value of its currency will decline relative to the value of the currencies of its trading partners. Oh yes, other things being equal, of course. Then we entered the real world and found that other things are never equal.

NEITHER SNOW NOR RAIN nor heat nor gloom of a hurricane can keep me away from a press breakfast at the Ritz-Carlton. And so it was, on the morning of the day Hurricane Isabel was poised to strike our nation's capital, that I found myself alone in an oak-paneled room waiting to meet Wolfgang Schäuble, the deputy chairman of Germany's Christian Democratic Union/Christian Social Union parliamentary group (he isn't nearly as boring as his title sounds).

In the 1980s, Schäuble served as chief of staff for Helmut Kohl.