“Europe’s turmoil is more than a currency crisis and was inevitable, in some form, even if the euro had never been created,” writes Robert Samuelson, “It’s ultimately a crisis of the welfare state, which has grown too large to be easily supported economically.”
Ezra Klein tackles this theory by noting that more statist health care systems seem to be more economically supportable. But fortunately, the “welfare state” versus “currency crisis” interpretations of the crisis are helpfully distinguishable thanks to the fact that Sweden and Denmark aren’t on the Euro and have the most expensive welfare states in the world. Ireland and Spain, by contrast, have relatively stingy welfare states. But the sovereign debt crisis exists where the Euro exists rather than where generous welfare states exist. Now it is true that if Europe totally implodes that will be a crisis for the welfare state, since the welfare state is at its largest extent in Europe, so a European crisis will imperil the model. But a crisis of the welfare state should strike Sweden most severely.
