Myth and Reality About the Euro Crisis:…So if public debt is your yardstick, then the Spaniards were paragons of virtue. They borrowed lightly despite the fact that their euro-zone membership gave them an all-you-can-eat buffet of financing at bargain-basement rates.
As Europe scrambles to find a solution to a debt crisis that’s threatening the world economy, it’s crucial to understand what actually happened in countries like Spain. Otherwise, policymakers will end up prescribing the wrong medicine, with disastrous results.
"The whole euro-zone strategy is predicated on the assumption that fiscal ill-discipline caused this crisis," said Simon Tilford, chief economist for the Center for European Reform. "That is a radically incomplete analysis."
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via ---> P. Krugman
