After hectic activity, Greece and Italy at last seem on a better track toward financial stability. Americans can rejoice in seeing this part of the European economy headed back on the rails, given its importance to U.S. trade, markets, and personal investments.
Yet U.S. markets continue to fluctuate in response to developments in Europe. No responsible U.S. investor, especially major banks and Wall Street firms, would now hold bonds of countries whose economies are in peril. These include Greece, Ireland, Italy, Portugal, and Spain.
Some high-rolling investors are still speculating in such instruments. Italy is paying about 7 percent interest, an attractive rate of return, to carry out essential borrowing.
The central banks of some of the other 17 euro-zone nations, including Germany and France, hold debt from the shaky countries. This puts these lenders on the hook to bail out the countries and prevent default on their debt.
Greece and Italy seek to reassure investors by trimming their public spending radically. They also have replaced prominent, big-name political leaders.
In Italy, Silvio Berlusconi, who had served as prime minister off and on since 1994, stepped down under pressure last weekend. His personal life took him to court many times, yet he was saved repeatedly by his ownership of significant parts of the Italian media. His own brass also kept him on top of the Italian political heap.
Greece's former prime minister, George Papandreou, appeared to be competent but had to go. Throughout the crisis, he stood up and took it on the chin. But he was replaced last week by Lucas Papademos, a technocrat and former European Central Bank executive.
The European story isn't over, despite the changes in Greece and Italy. Spain, another eurozone weak sister, may be next. It showed no economic growth in the previous three months and faces elections on Sunday.