It has come to pass

Some warned the euro zone to cut to the chase more than a month ago…Failure to act has cost the euro zone a great deal of credibility and required a larger commitment than it would have if undertaken earlier. Here’s how Wolfgang Munchau of the FT sees it:

Angela Merkel and her inexperienced economic advisers have no idea about the dynamics of sovereign crises. They never bothered to look at the experience of other countries, notably Argentina. Waiting until the moment a country is about to fail – which is how the German chancellor interpreted the political agreement she accepted in February – constitutes an abrogation of leadership that is bound to end in financial ruin. It means that everybody, Germany especially, has to pay billions of euros more than would have been the case if the EU had sealed this in February.

Don’t say you weren’t warned… On March 25, we wrote:

The fact that in all likelihood that the package will require Greece to exhaust its ability to borrow in the market may, in fact, precipitate the very crisis the governments are trying to avoid.

It has come to pass. Crisis and all…