The Euro crisis is not over. After more than 17 emergency summits, France and Germany agreed to modify the Treaties and apply sanctions to Member States who stray from the Maastricht criteria. They could have spared themselves the effort.Back in 1997, I worked at the Dublin summit. That is when France obtained from Germany to water down the automatic sanctions they are trying to enforce today. Unfortunately, it will take many months before such a treaty is elaborated and then ratified. Political Time is much slower than the Time at which markets function. And democratic Time is even slower. By the time the Europeans have their ducks in a row, Greece, Italy and Spain will have defaulted , and rating agencies will have degraded the rest down to junk bonds. The only solution is an accelerated federalization of Europe with executive powers to the Commission. Unfortunately, the many european peoples do not feel european. And the more Germany asserts its muscle, the more the rest of Europe is remembering WWII.
Seen from Europe, nobody understands the gridlock in Washington. Obama is still very popular over there. He has forestalled a Depression that could have come from the recession given to him by George Bush. He saved the auto industry and Wall Street and the stimulus money is starting to work. By the time the election comes, the health care reform will slowly enter into force and it will be very difficult for the Republicans to take it down. Besides, republican candidates are hostage to the Tea Party and are so far right that they might very well be unelectable. In France, the population barely feels the economic crisis because of "automatic stabilizers", aka social cushions which provide a soft landing for the most affected.