The 60 Minutes look at the Euro Crisis

With the March's US employment report cooling the momentum, this slow and fragile recovery of the US economy looks to be exposed to other factors such as oil prices and the European credit crisis. In a recent 60 minutes segment 'An Imperfect Union', they have a closer look at the potential exposure that the US has to this crisis, with a tough look at the Euro zone.

The US and European comparison

There are many comparisons that can be made between the US and the Eurozone, with about as many similarities as well as differences. The credit crisis in the US in 2008 has crossed continents to the Euro zone both bringing the regions into deep recession. As 'An Imperfect Union' points out, one of the major differences is where the US crisis saw financial institutions facing bankruptcy, the Euro zone could see entire countries going into bankruptcy, using the Greek bailout as point in case.
Just like in the US, Europe has lived beyond its means on credit, eventuating to many of the large European banks having to be bailed out by the European Central Bank with 'easy credit'.
London based financial analyst Louise Cooper highlighted the extraordinary nature of the European crisis with a western country (Greece) defaulting on their loan payments, not seen since the Second World War.

The Euro: The Currency that United is now Dividing

The Euro is one of the world's newest currencies in the world's oldest regions. Europe has thousands of years of history, with many different cultures and countries often at war and dispute with each other.
The Euro zone is described as a 'Loose economic alliance', and compared to the US's Federal Reserve this description (whilst could be viewed as condescending), is not too far from the truth. Even though the currency unites 17 nations, decisions are not made quickly as there is no one European equivalent to a Ben Bernanke. Lack of 'Unity and authority' is seen as one of the biggest structural failures of the Euro zone. With the inability to make swift changes and updates to the Euro's monetary policy has hindered recovery.

Austerity

Whilst the European leaders claim that the austerity measures implemented have averted disaster, the segment points out that a potential change in leadership could see a retraction of these measures, as the 'battle between politics and economics' continues in the EU.

Risk of Spreading Collapse

The domino tumble of southern European nations (Greece, Italy, Portugal and Spain) is still a very real possibility, and just how much the US economy is exposed to further European collapse is clearly a debate that will continue well into 2012.