Economic Outlook: Common cents

It is legal, a German court ruled this week, for the German chancellor to support a bailout for Greece, Ireland, Portugal and whoever is next in line.

The ruling provided a modicum of relief for investors concerned the constitutional court could have pulled the rug out from under a $154 billion international bailout for Greece to which Germany is the largest contributor.

The ruling is a technical victory for Chancellor Angela Merkel, but not a popular one among voters who wonder why Germany is helping to bail out a country known for sun-bleached beaches and generous pension plans. Industrious Germans have to work for a living. Now they have to bail out the beach bums.

Point of fact, there are 17 members of the eurozone and each have a stake in the currency that is threatened by fiscal upheaval in Greece, Ireland, Portugal and potentially Italy, Belgium and Spain.

That means there are 17 constitutional courts and any number of chaotic interpretations to a bailout plan. In Finland, it occurred to someone that Greece should throw some collateral into the mix. If Greece defaults on its bailout, Helsinki could become known for its sunny beaches.

Would German voters be swayed if the deal included a discount week at a Greek resort for every German taxpayer? Don't laugh. Many economists say Europe's finances would balance themselves out if more Germans patronized Greek goods and services and Greeks bought less from Germany.

Currently, Greeks buy German cars and cameras, while Germans -- wait for it -- buy Greek olives, ouzo and feta cheese. Somehow that doesn't quite stack up.

Fiscal leaders, including European Central Bank President Jean-Claude Trichet, are looking at another solution, however, one that doesn't include suntan oil. There is a growing call in Europe for a centralized economic power that could raise bailout funds through a collective tax, basically turning Europe into the "United States of Europe," as a recent New York Times article described it.

Now would be a good time to remember those 17 constitutional courts and ask how far away a genuine solution is for the European debt debacle. Investors might well find renewed confidence in a so-called euro-bond backed by the economies of 17 countries. Meanwhile, Europe is learning you can't have it both ways. You can't support a common currency without a common treasury.

In international markets Wednesday, the Nikkei 225 index in Japan added 2 percent while the Shanghai composite index in China gained 1.8 percent. The Hang Seng index in Hong Kong rose 1.7 percent while the Sensex in India rose 1.2 percent.

In Australia, the S&P/ASX 200 index rose 2.6 percent.

In midday trading in Europe, the FTSE 100 index gained 1.8 percent while the DAX 30 in Germany rose 2.6 percent. The CAC 40 in France gained 2.1 percent while the Stoxx Europe 600 added 1.8 percent.