Traverse City Record-Eagle

June 23, 2012

Another View: Small incidents have consequences

New Castle News

---- — In June 1914, Gavrilo Princip assassinated Austrian Archduke Franz Ferdinand.

His reasons were nationalistic. Princip was a Serb who was seeking independence for Yugoslavia from the Austro-Hungarian empire.

This killing in Sarajevo of an emperor's nephew might seem to be a relatively minor matter from an American perspective. But it set in motion a series of events that eventually plunged Europe into World War I.

It was a war America sought to avoid, but eventually it was dragged in. And the conflagration forever altered Europe and the West, leading to such events as the rise of communism in Russia and the transformation of the United States into a dominant world power.

You could say that this single assassination paved the way for much of human history in the 20th century.

We bring this up because of what is happening now in Greece and Spain. These two relatively small European countries have become economic focal points. Markets around the globe are roiling over their economies in ways that belie their size.

The main issue is debt. Greece and Spain are heavily in debt and plans to deal with the resultant economic challenges mean considerable sacrifices on the parts of their people.

The uncertainty is how the citizens of these two countries will respond to such hardships after years of economic recession. The concern is that they may balk at tough fiscal discipline, and the countries may default on the money they owe to other nations and eventually break away from the European Union.

International finance is something like a house of cards. A national default on debt would set in motion a series of responses that could wreak havoc with the international economy.

Spain and Greece must get their finances in order. Ignoring economic realities would postpone — and exacerbate — the inevitable.

New Castle News New Castle, Pa.