Media starting to pick up on European crisis, but still doesn't really understand it

In the New York Times today there is an article about how the U.S. financial crisis is spreading to Europe. Mostly, it blames the U.S. and assumes similar steps will be taken in Euroland to stave off a banking collapse. But the media and the analysts fail to understand that there is a huge distinction between the U.S. and member nations of the Eurozone, which is, that the U.S. is a currency issuing nation and can come up with the $700 billion or whatever amount to arrest a banking panic. European nations cannot. Only the European Central Bank can do that and it is precluded by treaty from coming to the rescue.

"In the last two days, governments from London to Berlin have seized or bailed out five faltering banks. In Ireland, where rumors of panicked withdrawals from banks spooked the stock market, the government has offered a two-year blanket guarantee on all deposits and bank debt."

"The Irish plan guarantees bank deposits and debt for customers and creditors of six banks. That makes the government responsible for $400 billion, twice the country’s economic output."

Mike Norman asks:
"Where will it come up with the money? It is not a currency issuer."

"Ireland’s finance minister, Brian Lenihan, traced his country’s predicament back to Lehman Brothers, saying that the American authorities 'were mistaken in permitting that bank to go to the wall because it has had very serious consequences for the world financial system.'"

Mike Norman says:
"He's right. That was a dumb move on Paulson's part. He caved to political pressure and in so doing set of a systemic crisis."