AEI's John Makin examines the consequences of German deflationary policies and Greece's probable exit from the eurozone in the latest Economic Outlook.

When the G8 major economies convened at Camp David last weekend, the continuing crisis of the euro, common currency of 17 European Union (EU) members, dominated the economic discussions. The agonies of Greece, badly divided in recent parliamentary elections, and forced to vote again on 17 June, were at the forefront.

Greece's economic and political unraveling could not be coming at a worse moment for President Obama. The crisis has the potential to send shock waves not simply through Europe but also through global financial markets on the very eve of the U.S. presidential election.

In the run-up to this weekend's G-8 summit at Camp David, journalists have unfavorably compared European "austerity" with Barack Obama's economic policies.

On May 6, all eyes will be focused on the second round of the French presidential election, which Socialist challenger Francois Hollande is likely to win. Equally important for Europe’s future is the Greek parliamentary election scheduled for the very same day.

America's version of capitalism has been much more dynamic than Europe's. Why don't Obama and Romney debate that?

With Europe collapsing, China stumbling, and India and Brazil retreating from full free market reform, we’re the last stable, pro-growth economy left.  

Attempts at austerity and deleveraging in Europe have converted an economic problem into a political dilemma, with leftist governments rising against Germany's austerity-laced rescue packages. Germany now faces a tough economic decision that will involve choosing between a breakup of the current euro system and a movement toward a common fiscal policy in Europe.