European countries feel the pain as cuts keep coming

The Washington Post reports:

A retiree at age 59, with a comfortable pension and a generous severance payment as well, Yolanda Hatzi knows she got a good deal when she left the National Bank of Greece three years ago.

She also knows such arrangements have added to the rage that had her college-age daughter "throwing stones" in recent riots. That deep anger threatens to mount across Europe as governments slash at social guarantees considered integral to the continent's political life but which have become too expensive to sustain.

Some foresee widespread social protest as cuts take place amid high unemployment; others predict a potential shift of sovereign authority to European institutions. But the outcome of efforts to control government debt could rewrite an economic order that has left Hatzi's generation in relative comfort but world markets nervous about financing it.

Investors speculate that Europe might not have a dynamic enough future to foot the bill, and it has left politicians from Athens to Madrid, and from London to Berlin, scrambling for a response.

Great moments in Keynesian economics.