The election of Francois Hollande in France was a turning point for the Eurozone and likely marks to beginning of the end of the great European experiment. Now without an ally to back her up, German Chancellor Angela Merkel has started the dangerous game of chicken that puts the Eurozone on the brink of failure.
The problem is the citizens of Greece are fed up and no longer care. They are expected to pay and up a large debt payment this week. The question is, can they? Even if they can it does not matter. Greece will be the first country of the Eurozone to leave and their departure will cause a cascading effect that may breakup the entire Eurozone altogether. Likely the other countries of the PIIGS will be next on the list, starting with Italy and Spain.
At the same time all of this is happening, recent elections in Germany suggest that confidence in Angela Merkel’s party is waning. This could spell big trouble for her next year, but next year is a long time from now. The Eurozone crisis is happening now, and what happens there will have an effect in the U.S. economy.
The bad part of all of this is that President Obama, Speaker John Boehner, the Tea Party, millennials hard at work in school…. no one can do anything about this because it is out of our reach. It is up to the Eurozone to cleanup their own mess. Unfortunately it is starting to look more and more like they will not be able to. Things will likely get worse before they get better. Hopefully the spillover won’t be as bad as I think it might be.