It was quite a weekend of excitement as the Barclays Premier League once again showered us with tantalizing games between the Manchester and London clubs which served as a great advertisement for  the sport. Being a ardent Manchester United fan, I was thrilled at the win but at the same time shocked at the last gasp winner for our rivals-Manchester City. The cliche-Nothing is permanent in life except the love of the game-was corroborated as the game never fails to amaze us. Another topic that we love to talk about is Europe and its escalating problems.

We started off this New Year by exclaiming that the choices we made today are constrained by the choices we made in the past, and the choices we make in the future will be limited by the choices we make today. Europe chose to create a free trade zone, and then some of the countries to lock themselves into the gold standard of a single currency, relinquishing the ability to adjust any imbalances in their economies by changing the price of their own currencies.

The choices made in the past have developed problems escalating to troubled territories never seen in the history of mankind. Debt has grown to the size that it cannot be sustained. Basically, Europe has three main problems:

1. A growing number of European countries are insolvent or close to it.
2. The growing fears of multiple defaults will lead to banks becoming insolvent and in need of bailout packages in billions of euros of new capital.
3. The massive trade imbalances between the peripheral countries and the core countries is the real problem in Europe. Without the ability to adjust currencies, those trade imbalances will render any debt solutions, as a country cannot balance its budget while it runs a trade deficit and its citizens and business deleverage.

It is widely-known that one cannot solve one problem without keeping the others in mind. Either they all get solved or none will ever be solved. If the policy-makers can kick the can down the road by solving problems 1 and 2, problem 3 will put you shortly back to square one and vice-versa. Problems are aplenty but when can the policy-makers come out with appropriate solutions. The clock is running down!