One of the arguments for a Greek bailout has been the threat of financial “contagion.” That threat is real enough, but, writing in the Guardian, Open Europe’s Raoul Ruparel, asks an awkward question:
Ultimately, if a country with a GDP of only 2.5% of the European economy can bring down the entire system, that’s probably a sign that the system is fundamentally flawed. Regrettably, politicians are using the misguided comparisons with Lehman Brothers as an excuse to ignore and perpetuate Europe’s real problem: an unhealthy, undercapitalised banking system and a monetary union based on the premise that political leaders’ commitment alone could make economic and democratic realities disappear.