currency rather than adopting the new euro were seen as old fashioned, parochial, reactionary, and out of sync with the new world. that was then. but over the past year or two, britain s position has begun to look pretty sensible. the euro has obvious benefits. no more worrying about dozens of currencies going up and down. but given how it was set up, it also has many flaws. let s take a look at them through the prism of one country, greece, the poster child of the euro s problems. when it first joined the euro zone, it rode a wave of excellent economic growth, about 4% a year for eight years. that s more than germany, more than the u.s. finally, greece had a solid currency and was able to borrow lots of money at low interest rates. but that was the problem. it wasn t really greece s currency. the european central bank in frankfurt was setting rates. tiny greece wasn t even a factor. so athens borrowed and spent like crazy, creating a little welfare state paradise of its own.
welfare state paradise of its own. but when trouble hit, that same single currency proved to be a straitjacket. growth has collapsed. greece s debt is about 150% of gdp, and it cannot devalue its currency to make its goods cheap and attractive on world markets. it s stuck with the euro. and rich european countries, chiefly germany, resent having to bail greece out because they can t force it to change its spendthrift ways. the fancy economic way of saying this is that the euro zone has unified monetary policy one currency but still has diverse fiscal policies. so what to do? two options are being debated. and those two options highlight europe s opposing forces. first, the eu leadership s plan, stay the course. more austerity for greece. more budget cutting. and, of course, more loans to tide it over. ignore the fact that greece can actually never repay them. the second option, some top german officials say they don t
but first up the chances of peace in the middle east after the latest round of speeches by prime minister netanyahu and president obama. i ll be joined by tom friedman of the new york times who is just back from the middle east. now, here s my take for this week. we ve just gone through an arcane debate about whether barack obama said anything new when he called for an israeli/palestinian settlement based on 1967 borders with mutually agreed upon land swaps. in fact, that has been the working assumption of all negotiating parties, america, israel and the palestinian authority, for over 20 years. it is what the camp david talks of 2000 were based on. it s what elmerit s talks were based on. the real shift in u.s. policy was president obama publicly condemning the palestinian strategy to seek recognition as a state from the u.n. general assembly in september. instead of thanking obama for this, prime minister netanyahu chose to stage, in the words of the former israeli di
but first up the chances of peace in the middle east after the latest round of speeches by prime minister netanyahu and president obama. i ll be joined by tom friedman of the new york times who is just back from the middle east. now, here s my take for this week. we ve just gone through an arcane debate about whether barack obama said anything new when he called for an israeli/palestinian settlement based on 1967 borders with mutually agreed upon land swaps. in fact, that has been the working assumption of all negotiating parties, america, israel and the palestinian authority, for over 20 years. it is what the camp david talks of 2000 were based on, it s what elmert s talks were based on. the real shift in u.s. policy was president obama publicly condemning the palestinian strategy to seek recognition as a state from the u.n. general assembly in september. instead of thanking obama for this, prime minister netanyahu chose to stage, in the words of the former israeli dip