This from Charles Gave this past week. Make it your weekend reading assignment. "Instead, Europe now faces the task of growing itself out of its debt problems even as global growth looks shakier. But with a) debt levels so high, b) losses still to be reckoned with and c) competiveness diminished, a number of European countries are clearly stuck in a debt trap from which the escape route is rapidly closing. "This brings us back to the fact that the original Euro experiment epitomized the institutional folly and arrogance that Hayek identified as the 'fatal conceit'. In 2002, I published a book in French called Lions led by Donkeys (currently only available in French) in which I argued that the Euro would lead to massive misallocation, with too many houses in Spain, too many factories in Germany and too many civil servants in France (and Greece, Italy, etc). The “too many houses” in Spain is inarguable, as is the “too many civil servants” in Greece. There are still hopes that France and Germany, as the two largest economies and most influential policymakers in the EMU, can orchestrate an EMU rescue. But in fact these two countries exemplify the growth risks facing the Eurozone."