Aron Ralston's Lesson for the Euro

The views expressed in this column are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates.

Many of the bureaucrats in Europe believe in a single mantra for keeping the euro:  "It would be too expensive to let it go!"

Well, that may be, but before jumping to that conclusion let's look at the facts:

• Monetary policy is as ineffective as possible.  There is no mechanism to add stimulus to those regions where it is needed without also stoking inflation fears elsewhere.  And the opposite is true as well.
• Culture clash in the region disallows labor mobility.  The wide disparity in unemployment rates does not seem to be enough to get people to move across borders for new opportunities.  Language barriers may explain a lot of this challenge.
• A combined fiscal policy is a nonstarter.  Germany is not about to allow the other 16 nations - most of whom have proven entirely irresponsible - to determine how to spend their wealth. 
• There has been very little (any?) progress toward addressing Europe's true problem: irresponsible spending.  In fact, with every "bailout" plan imagined and implemented the moral hazard issue increases.

Many still hope to save the euro.  In their estimation, the costs of splitting the currency (physical, contract, and social) continue to outweigh the costs of programs implemented to date.  Of course it's Germany's money that is being spent so they have the final say.

But like Aron Ralston's 127 hours in the Utah desert, perspectives change with time.  Certainly the idea of cutting off his arm did not occur to him in hour 1 or hour 2.  But by hour 127, the possibility was a godsend.

Are we approaching the 127^th hour in Brussels?