Wednesday, June 22, 2011

Europe's vulnerable underbelly

In mythology and popular media (such as Tolkien's "The Hobbit", where Smog the Dragon has a most inconvenient equivalent to the heel of Achilles) the notion that tight systems have a soft midsection is a reoccuring theme.

In today's Europe, that notion has a geographical truth to it, in the sense that Greece and Italy represent the major systemic risks to the entire Euro area.

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