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One of my editors suggested I comment on this story:

As debt-plagued Greece struggles to meet Europe’s strict terms for receiving its next round of bailout money, the lesson of Portugal might bear watching. Unlike Greece, Portugal is a debtor nation that has done everything that the European Union and the International Monetary Fund have asked it to, in exchange for the 78 billion euro (about $103 billion) bailout Lisbon received last May. And yet, by the broadest measure of a country’s ability to repay its debts, Portugal is going deeper into the hole.

Unfortunately, I don’t know what the hell to say. The basic story is simple: by demanding austerity from Portugal, European leaders are putting the Portuguese economy into a downward spiral. As Portugal’s economy deteriorates, their debt levels become ever more unsustainable, requiring yet more austerity and tanking their economy even further. This is the same cycle happening in Greece (and Spain and Italy), and it’s not clear where it ends.

But what’s the alternative? Shovel vast amounts of money into these countries essentially without condition? That’s just not in the political cards.

So what happens next? There are a few possibilities:

Europe muddles through. The PIIGS take a big GDP hit and put up with lots of riots and general misery, but eventually the global economy recovers, they stabilize a bit, and things start to slowly improve.

The PIIGS default on their debt and, perhaps, exit the eurozone and devalue their currency. After a wrenching few years, they start to recover.

The EU decides to become a genuine United States of Europe, and distribution of wealth from rich areas to poor areas becomes a permanent feature of the landscape, just as it is in the United States of America.

Frankly, all of these options seem pretty unlikely. Unfortunately, I can’t guess which of them is the least unlikely. But these have been the options all along, and they’re still the options. Nothing has really changed.