Understanding the current Euro crisis is no more difficult than understanding difference between a debit card and a credit card.
[Darris McNeely] This is a big week for the crisis that has been unfolding for many, many months in Europe. The Euro crisis - 17 nations all bound together by the common currency called the Euro have been going through a tremendous crisis of confidence and debt. Probably the biggest headline has been created by Greece, which is on the verge of leaving the Euro zone and because of its huge debt - they just recently had an election that was inconclusive, kind of kicked the can down the road. They're moving toward a meeting later on this week among all of the members of the European community to work out a solution for the current situation that is taking place.
What's the really simple way to understand what has been going on?
You have a number of nations in the Euro zone, 17, but some of them have been living beyond their means. Greece is one of them right here that as I mentioned has been a big problem of late. Italy and Spain are two others that are also bigger and they too have huge problems. These two, Italy and Spain, are deemed too big to fail by most everyone. And then of course you've got Germany, which is really in the driver's seat over here. And they have the money, the means, and essentially the control over the entire fate of this Euro zone situation and crisis at this point.
There is a very simple way to understand what has happened, perhaps that we can bring it down to our level.
You know, all of us have plastic that we carry around in our wallets - a credit card, a debit card.
Let's imagine if we're looking at the countries over here, Greece, Italy, Spain and others, and Germany and what has taken place. Let's imagine that nations like Greece for instance have used a credit card. They've taken a credit card and they've over a number of years run up huge debt that they cannot pay for. They've lived beyond their means and they're paying large interests rates as a result of that to service that debt and to keep things going. You all know as you use a credit card that you have to pay that bill off eventually. And if you don't, the debt continues to expand. And essentially that's what's happened with a number of these countries.
Germany on the other hand chose not to live by a credit card, but they chose to live by what again something we all carry, a debit card - an ATM debit card, you know the kind we put into a machine, punch in our pin number and we take cash out of our bank account. You can't use a debit card unless you have money in your bank that makes it liquid. You can't run up debt necessarily on that debit card. Germany has lived by an ATM card over the years. But other countries have lived by a credit card. And they've amounted huge debt that they can't pay for. And now they are all going to Germany, asking Germany to essentially give them their pin - their four digit, five digit, eight digit code to allow them to access the ATM card and the bank accounts of Germany. And Germany is saying nein, no, except under certain conditions, except under certain hard controls.
So, what's really taking place here in the whole political and economic discussion in the Euro zone is really perhaps some big dance that's taking place as to essentially how all of this is going to be sorted out and who's going to be really calling all the shots long-term for Europe. All bets are on the fact that Germany is going to be the ones that will be doing that. And if they will, we can probably look to a Proverb from the Scriptures that helps us to understand a point in regard to this.
In Proverbs 22:7 Proverbs 22:7The rich rules over the poor, and the borrower is servant to the lender.
American King James Version×it says, “The rich rules over the poor and the borrower is servant to the lender.” The rich rule over the poor. And the borrower is servant to the lender. That's what we're seeing taking place in the Euro zone right now and in Europe in general with this unfolding crisis that is coming to a point where at some point a decision will have to be made that will reorient and reshuffle the entire procedure and situation within Europe into something quite unlike anyone really does imagine.
We watch that. We understand, but to really know what's taking place - this is about as simple of explanation as we can come up with.
That's BT Daily . Join us next time.