Europe’s proposed financial firewall around Spain and Italy will prove any more effective in protecting those countries from another market onslaught than was the Maginot line in protecting France. The very design of the proposed firewall appears to be basically flawed in dealing with a renewed loss of market confidence in the euro’s long-run sustainability.

The recent election outcomes significantly changed the political leadership of France and Greece - American Enterprise Institute (AEI) Scholars Desmond Lachman and Danielle Pletka are available to comment on their economic and foreign policy implications.

In going along in May 2010 with the European charade that Greece did not have a solvency problem, was the IMF really standing for the proposition that the laws of economics do not and will not give way to political considerations?

The main problem with the recent IMF programmes to countries such as Greece and Portugal has not been one of size or duration but rather one of policy misdiagnosis. 

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.

If International Monetary Fund managing director Dominique Strauss-Kahn's proposal to increase the IMF's war chest by $250 billion is passed, it will likely prolong the euro zone's sovereign debt crisis.

Portugal could avoid Greece's horrible fate if it were to draw the right lessons from the Greek experience.

Considering the size of the exposure that might arise from IMF lending to the European periphery, the administration owes it to the U.S. public to be up front about the potential cost to the U.S. taxpayer of such lending.