European update

The big news, instead, is that Italian and Spanish spreads — the difference between interest rates on their bonds and interest rates on (presumably safe) German bonds — have widened drastically again. Last week’s big rescue plan apparently didn’t restore confidence.

Sometimes it looks as if the Europeans and the Americans are in a contest to see who can do the most to mess up an economy that should be very strong. Today, surprisingly, the Europeans seem to have won a round.

That’s from Paul Krugman.  The difference, of course, is that one set of problems is insoluble and the other is not.  The United States needs to avoid a financial crisis (and can), but you can argue that Europe needs to have one to cure its problems.