Europe's Biggest Tension

The news today is that the Euro crisis has returned to the Eurozone.

Portugal is crashing to the tune of 6% on the resignation of the Finance Minister, who says he can no longer support such harsh austerity.

Other markets are getting clubbed in the fallout. Spain is off nearly 3%. Italy nearly 2%.

The reality of Europe is that it’s a gigantic economic and political mess, where unemployment in the common currency area has hit a record of 12.1%.

On the other hand, it’s not like there aren’t signs of life in the economy, which appears to be coming out of recession.

Monday’s manufacturing PMI figures showed broad improvement across the Eurozone.

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But although these numbers are encouraging from a cyclical standpoint, these tiny greenshoots barely begin to make a dent in the gigantic economic problem, which will likely cause reverberations for whole generations.

Europe needs substantial economic recovery, fast. Otherwise the forces of politics will create more situations like that in Portugal, and the will to keep it all together will dissolve.

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