Euro zone crisis: Yeah, it’s back

Ah, Europe.

We love you for your food (hooray for cheese and wine!), your history, your stately cathedrals, your rolling, verdant fields of sunflowers and all that other good Europey stuff that Americans crave.

As for your management of your economy, still the world's largest economic bloc?

Not so much.

In case you haven't noticed, the euro zone crisis is back this week — from Spain, to France, to the Netherlands, the UK and beyond.

GlobalPost's senior correspondent Barry Neild in London has been digging through the mess this week.

Here's the gist of his smart take on what is increasingly looking like a depressingly bad movie:

"At the end of the last installment, it looked like the debt-stricken euro zone was over the worst of it. The European Central Bank had come galloping to the rescue with a massive injection of cash into the banking system. And a disorderly Greek default had been averted. But the latest sequel finds Europe once more in peril. This time, the crisis has evolved into a political mess."

That's because just about everywhere you look in Europe right now there's a big fat political crisis threatening to bring further instability to people, markets and, by a very real extension, the global economy.

France is currently in upheaval as President Nicolas Sarkozy — a once-firm but now-faltering partner of German Chancellor Angela Merkel — is teetering on defeat.

Sarkozy squares off with — zut alors! — socialist candidate Francois Hollande on May 6. According to the latest polling by Harris Interactive, Hollande holds a 10 percent lead over Sarkozy.

Meanwhile, the Netherlands is in political turmoil, too, as the government there tries to come up with a plan to slash spending.

As for Spain?

Things are even worse: unemployment has hit a record high of 24.4 percent, with 5.6 million Spaniards now out of work, while Standard & Poor's just downgraded Spanish debt for the second time this year.

Oh, and the UK now says it's back in recession, its first "double-dip" since the 1970s, as Barry Neild glumly points out.

So, my dear fellow Americans, why does all of this matter?

As Robert Samuelson writes, about half of the world's $80 trillion dollar economy is produced by the most advanced economies such as Europe, the US and Japan (as for the rest, think China, India, Latin America, Africa, the Middle East). 

If Europe tips back into prolonged economic turmoil, it will affect just about everyone in our interconnected global economy.

Markets could tank again, hurting your 401K and unnerving already fragile consumer confidence.

Companies worldwide, meanwhile, would suffer as they count on Europe's giant market to buoy their revenue and profit goals.

Moreover the unrest that's roiled much of Europe for the past two years or so — and all the political and social problems that go along with that — is never a good thing for short-term economic growth, which must occur before companies start hiring people again in the US, Europe and elsewhere.

Here's how Samuelson lays down the bad news:

"If Spain's crisis deepens Europe's recession, it could tip the entire world economy into a stubborn slump. The ramifications would be enormous, including: reduced odds of Barack Obama's reelection, assuming a weaker U.S. recovery; less political cohesion and more social unrest in Europe (even now, the European Union's unemployment rate is 10.2 percent); and growing pressures in many countries for economic nationalism and protectionism."

So, yeah, the euro zone crisis is back and, yeah, it matters.

Who's up for a good bottle of Domaine du Pagau Chateauneuf-du-Pape and a pungent slab of Berthaut Epoisses De Bourgogne?