We hear about how Europe is in trouble because of not being an "optimal currency area," or because of excessive debt, or because of bailouts.
Rubbish. The US, Brazil and China shouldn't qualify as optimal currency areas and won't disappear in a ground hole because of that. The Soviet Union didn't end because it wasn't an optimal currency area.
Excessive government debt is a big problem, but Japan is not burning in Third World hell because of excessive debt. The speed of debt accumulation in the US after the misadministrations of the dynamic duo Bush & Obama is probably more significant than in most European countries (hard to be sure due to skeletons in the closets here and there), but the US will not go "puff" because of debt.
Bailouts create moral hazard and injustice for sure. But bailouts are as old as the creation of the very first human government, and repeat themselves with amazing regularity throughout history. Humanity progressed everywhere despite bailouts.
So, why is Europe in trouble then? It's because of the deeply entrenched entitlement culture of its citizens. This is the real problem behind European strikes, bailouts and debt. It beats bad governance, it beats corruption, it beats silly monetary theories. It represents the rejection of Bastiat's hope:
I want not so much free trade as the spirit of free trade for my country. Free trade means a little more wealth; the spirit of free trade is a reform of the mind itself, that is to say, the source of all reforms.Europe is in trouble because it lives Bastiat's nightmare. As simple as that.