Batten down the hatches, Europe

With Socialist leader Francois Hollande likely to become the next president of France, Europe’s hot populist anger is about to confront the cold austerity measures required by the euro zone, with a predictable result: a storm that rattles the foundations of the European economic house.

Financial traders and treasury ministers are debating this week just how much damage this political-economic collision will bring. Some argue that it could take down the structure entirely. Others insist that Germany, for all its insistence on austerity, will never let the structure collapse — and will make the necessary concessions to keep the common currency intact.

Europe is a crisis that keeps on going, breaking through each firewall and emergency bailout. The reason is that under Germany’s leadership, the Europeans have opted for a combination of austerity measures and rescue plans that has had the effect of financing ever-growing indebtedness. The European Central Bank is pumping in liquidity, which keeps bleeding out because the austerity measures don’t allow the economies to grow and heal themselves. It’s a perpetual motion machine of economic frustration.