European stocks are set to drop about 2.5% this morning. With a total capitalization of about 11 trillion dollars, this represents a paper loss of about 275 billion dollars in the European stock market alone.
The biggest cost to the rest of Europe is going to be a break of faith in the European governance and leadership. The fact that they would actually let the entire economy of a member of the EU crash and burn over a relatively minor issue of economic philosophy (whether is better to cut a measly 1 billion in spending or raise taxes by the same amount) shows an amazing lack of responsibility and solidarity.
This will probably go down in history the world’s costliest game of chicken gone wrong…
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