Barry Eichengreen writes:
In focusing on summit declarations and promises of far-reaching reforms of EU institutions, investors are missing the real risk: the collapse of public support for, or at least public acquiescence to, the austerity policies required to work down heavy debt burdens – and for the governments pursuing these policies. Mass anti-austerity protests are one warning sign. Another is growing popular support for neo-Nazi movements like Golden Dawn, now the third-largest political party in Greece.
The rise to power of a “rejectionist” European government – that is, one that unilaterally rejects the policy status quo – would immediately bring the crisis to a head…….
via Europe’s Populists at the Gate by Barry Eichengreen – Project Syndicate.