Ongoing Euro Crisis

So here's my question: is the ongoing crisis in the eurozone a problem of economics, politics or psychology? Well it's obviously a question of economics, I hear you say. And of course, you're right. People in countries like Greece and Portugal have been living high on the hog, maxed out the credit card, paid themselves too much, awarded themselves gold plated pensions, whilst - how can one put this delicately - taken a somewhat flexible view about whether they are under any obligation to pay any taxes to their governments.

Let me give you my favourite example of what I mean. In Athens they introduced a swimming pool tax as a means of clawing back money from wealthy Greeks. If you believe the tax returns, just 300 Athenian families have swimming pools, but go on to Google Earth and zoom in a bit - and of course there are thousands and thousands of homes with pools. Tax evasion is a national sport. So yes, of course this is an economic crisis, and that is why not just Greece, but Italy and France have been passing emergency austerity packages to cut their countrys' debt levels.

But it is a political one too. And it is where politics meets economics that the problems begin. Germany doesn't want the European Central Bank to do what the Federal Reserve has done in the United States - namely to print money to help the economy through the worst of the slowdown, and to become the lender of last resort. For the Germans it is partly a question of history - the memories of their hyperinflation between the world wars live on, when you had to have a wheelbarrow full of cash to buy a loaf of bread. But it's not just that - Germans believe the spendthrift countries will never change their ways if they know that the ECB backed by Germany will always bail them out in the end.

Which brings me to psychology, and the poker players among you will relate to this. Europe needs to sit across the table from the money markets and stare the bond traders in the eye, and say with utter certainty 'we'll back our currency to the hilt'. Little old landlocked Switzerland did this and saw them off. It's an unlikely image, but maybe we need Angela Merkel to do a Clint Eastwood. Her eyes screwed up and a 44 Magnum in hand, saying to the markets: 'go ahead, make my day'. This is Jon Sopel for CBS News in London.