Europe’s Dominos of Doom
Many see Greece as the potential first domino to fall in a scenario that runs as follows: the Greek austerity measures do not suffice, the debt crisis deepens, and the risk of a sovereign default spreads to other European economies. But this domino theory is incomplete, because it overlooks social and the political spillover effects – that is, effects that go well beyond the economic realm.
BRUSSELS – The fear of contagion has spread over Europe. Many see Greece as the potential first domino to fall in a scenario that runs as follows: the Greek austerity measures do not suffice, the debt crisis deepens, and the risk of a sovereign default spreads to other European economies. As the Greek domino falls, countries like Portugal, Spain, or Italy start tumbling, and a small economy’s crisis turns into a major European calamity.