But the European countries appear to have an advantage over other countries: they have shown again and again during the last decade that they are more capable of publicly recognizing when their governments engage in fiscally irresponsible behavior. Even though this public understanding doesn't necessarily translate into action, this is better than the preferred political approach in most other countries, including the US: denial and obfuscation.
An example is given by this Financial Times article on the European Commission's realistic and pragmatic warnings to European countries regarding their excessive budget deficits:
Contrast the ability of the European governments to openly debate such an important issue with the unquestioned, unrestrained and irresponsible fiscal stances that have been the norm during the last and current administrations in the US.
The European Commission has warned the eurozone's four biggest countries - Germany, France, Italy and Spain - that their growth forecasts for the next three years are too optimistic, endangering their ability to cut deficits in line with European Union rules.
The Commission had asked the four, and others including Austria, Belgium, Ireland and the Netherlands, to spell out how they intended to meet medium-term deficit reduction targets to 3 per cent or less of gross domestic product - the EU's ceiling in normal economic times.
The Greek crisis for example, which has been cited by many as a sign of European weakness, is in my interpretation instead a sign of strength: government irresponsibility has been clearly more constrained by markets in Europe than in the US and in BRIC countries. Due to some curious and probably unplanned institutional constraints, governments in Europe find themselves forced to face their economic stringent realities much earlier than in the US and in BRIC countries, and for me this is evidence that their fiscal institutions are probably better positioned to face the fiscal challenges to come.