One of the most prominent trouble spots in the global economy is Greece. The government’s massive and rapidly expanding debt burden has raised concerns that the nation might be forced to declare bankruptcy. In light of this danger, the US ought to take action to resolve Europe’s internal dilemma. It should push for measures to contain the crisis while preventing similar situations from arising elsewhere.

Greece’s default would be disastrous for the United States. It would threaten to reverse the nascent global economic recovery and work to destabilize the European Union. If Greece defaults on its loans, investors will likely lose confidence in other European countries with high debt ratios, raising borrowing rates to prohibitive levels. This would create a vicious cycle in which those countries would then find it much more difficult to finance debt, which could possibly trigger further default. Unfortunately, numerous obstacles exist to a potential EU-orchestrated bailout. There are legal and practical questions to deal with, as well as political considerations. Already, public officials in other EU nations, most notably Germany, have publicly voiced skepticism about whether to intervene in Greece, citing the high costs associated with such a step.

After several agonizing months of uncertainty, it seems as though most countries have emerged from the depths of the economic collapse that ensued following the 2008 financial panic. US GDP expanded by 5.7 percent in the third quarter of 2009, while Europe has witnessed slowing rates of decline, and in some cases, including Great Britain and France, even modest growth. The response undertaken during the crisis by Western leaders, most notably US President Barack Obama and UK Prime Minister Gordon Brown, was extraordinary, combining bank bailouts with expansionary fiscal and monetary policies.

While these remedies appear to have succeeded to a degree, they came at an enormous cost; both the United States and Great Britain now face budget deficits in excess of 10 percent of GDP. If the economy enters what experts have dubbed a “double-dip” recession, in which the initial recovery is followed by a second downturn, it is unlikely that governments will be able to intervene on the same scale as they did during the initial phase of the crisis, owing to insufficient resources and public hostility. The US spent $800 billion on last year’s economic stimulus package while the Federal Reserve drove interest rates to record lows. Incurring more debt through, for example, another stimulus package would further risk the long-term financial stability of the United States. Thus, it is imperative that the United States and its allies maintain the current fragile, uneven recovery, or they will be doomed to suffer a protracted period of economic underperformance similar to Japan’s “Lost Decade.”

With so much depending on the revival of Western economies, any potential obstacle to the achievement of that goal must be removed. Greek insolvency would not only bring its own economy to a grinding halt, but could also have a domino effect. Many other members of the European Union, including Spain, Portugal, Italy, and Ireland, are also coping with excessive debt levels incurred by rampant spending over the past decade and sharp drops in revenue owing to the recession. In spite of EU rules requiring that budget deficits not exceed 3 percent of GDP, the lack of any effective enforcement mechanism, combined with “creative accounting,” has allowed profligacy to go unpunished. Already, confidence in the Euro has plummeted, causing its relative value to drop. Concern about the future of the common market could lead Eastern European nations, such Estonia, Latvia, and Lithuania, to rethink their planned entry into the Euro Zone, while strengthening the appeal of “Euroskepticism.” Critics of the Euro have long argued that a monetary union would lead to this kind of a crisis; now, their warnings appear to be vindicated.

A weakened EU is not an outcome that would be favorable for the United States. Although American and European politicians have their differences on some issues, a strong, unified Europe is in the United States’ best interest. As the US combats the complex and pressing questions of international terrorism, nuclear proliferation, human rights abuses, trade negotiations, Third World poverty, and environmental degradation, it is important to have a partner capable of assisting in its effort to provide global leadership. A weak and divided Europe cannot fulfill this role if it is plagued by economic disunity and decline.

To this end, the United States ought to play an active part in preventing Greek default. It should lean heavily on France and Germany, the EU’s economic powerhouses, to orchestrate a bailout that includes strict austerity conditions, cutting spending and raising interest rates, along the lines of International Monetary Fund standards. A major US diplomatic campaign, with the active involvement of President Obama, can display the vitality of this issue. Greece needs more than a band-aid solution; it needs a complete overhaul of its economic system. For years, Greece has run deficits well above EU limits. Rampant corruption and wasteful spending have brought the country to its current juncture. Even today, in the midst of the crisis, intransigent public sector unions have organized street protests in Athens and elsewhere, demanding immunity from the severe repercussions of fiscal austerity.

Critics contend that past interventions that imposed austerity have had disastrous consequences. While this did occur in the short term in some cases, such as the Asian economic crisis of 1998, in the long run, budgetary restraint is the only way to set countries on the path toward sustainable growth, as opposed to a temporary expansion followed by yet another crisis. Countries such as Thailand, Indonesia, and South Korea, all of which accepted IMF loans in the late 1990s, rooted out corporate mismanagement and other practices that inhibited productivity, and the result was protracted economic expansion over the course of the past decade.

Like the countries of East Asia, Greece cannot be given a bailout without strings attached because it will create a problem of moral hazard, allowing Spain, Italy, and Portugal to continue their prodigal ways in hopes that they too will be protected. Instead, they should be following the example of Ireland, which in recent months has introduced tough reforms designed to control its budget deficit, including sharp pay cuts for civil servants. Although controversial, these measures have been largely accepted by the Irish public, as they acknowledge that the short-term pain of austerity is preferable to continued financial turmoil. Hopefully Greece will demonstrate a comparable degree of responsibility in dealing with its dire financial situation.

US involvement is crucial to ensuring that a rescue package is formulated and organized according to the principles of austerity. France and Germany are hesitant to offer assistance, but could be persuaded if the United States emphasizes the importance of the Greek situation to the global recovery and the perils of allowing the crisis to spread. Such an approach will reap vast rewards for the US and its allies in the form of increased economic growth and greater geopolitical stability. For these reasons, President Obama ought to make securing aid for Greece a top priority.

The events in Rosarno were not the first time that organized crime has been tied to immigrant unrest in Italy. In September of 2008, the execution of six African immigrants by the Neapolitan mafia in Castel Volturno spurred such intense riots that the Italian government was forced to call in the Italian National Guard to restore order. In February 2009, immigrants awaiting deportation set fire to the detention center on the Island of Lampedusa on which they were being held. The immigrant unrest situation is not new, and the Italian government’s failure to address it constitutes gross negligence.

While immigrants perform vital roles for the Italian economy, they exist in an underclass entirely distinct from mainstream society. There are an estimated 4 million legal immigrants in Italy out of a total population of 60 million, along with an unknown number of illegal immigrants. Corruption or skewed data often obscure the status of these workers. The Italian government has only just started to seriously acknowledge the problems of ignoring such a large immigrant population. In addition, organized crime syndicates often shield illegal immigrants from Italian authorities, so their actual numbers and locations are not known. As many aspects of the Italian economy are based on the exploitation of low-cost immigrant labor, the wellbeing of the country depends on the availability of this labor. The International Organization for Immigration estimates that immigrant labor accounts for 9 percent of Italy’s GDP. Despite this, immigrants are not integrated into Italian society, live in squalid conditions in makeshift houses outside cities, and often lack basic rights such as access to amenities, health care, or job contracts.

In Rosarno, for example, official statistics state that there are about 1,600 agricultural workers, among whom only 36 are non-Italian. This is nowhere near the truth; in fact, about 1,200 African immigrants perform the majority of the agricultural work in the area. The immigrants have no job contracts, so they must endure anything from beatings, to crime bosses’ demands for kickbacks, to downright refusal to pay wages. Going to the police is not an option, especially for those who are in Italy illegally.

The underlying discontent that caused the immigrant population to react so strongly to an attack on one of their own is likely a result of the strong control the ‘Ndrangheta has over their jobs and their lives. Mass riots are the only way for the African immigrants to express their discontent because if an individual stands up to the ‘Ndrangheta alone, he is immediately killed (such as in Castel Volturno two years earlier). Because they have no legal status or job contracts, illegal immigrants also cannot petition the police about their ill treatment and exploitation. The Italian government needs to acknowledge the discontent and the desperation of the immigrant population, and move to stop their exploitation rather than leaving them to fend for themselves against groups such as the ‘Ndrangheta.

Italian organized crime networks maintain a strong presence in Southern Italy, which includes Calabria, to this day. Unlike the most common mafia structure, the ‘Ndrangheta derives its strength from a horizontal network of blood ties, making it very difficult for the Italian authorities to infiltrate the organization. The head of Italy’s National Anti-Mafia Commission has stated that the ‘Ndrangheta maintains “extraordinary control” over Calabria. The ‘Ndrangheta controls the agriculture market in Calabria, and much of the rest of the economy as well. Often an African immigrant’s ticket to Italy and the potential for a new and better life is a deal with the ‘Ndrangheta, a ticket to Calabria, permission to live on abandoned land outside town, and work as a day laborer—paid in cash—all with no welfare benefits, or the protection of safety and labor laws. African immigrants in Calabria come to depend on the ‘Ndrangheta for their livelihood, and are ultimately at their mercy. Facilitated by organized crime from one end to the other, this system completely bypasses the immigration and labor laws of Italy. Therefore, any attempt by the Italian authorities to strengthen immigrant regulations will most likely be useless without also targeting the fundamental problem. Italian policy should focus on identifying and dismantling the organized crime system.

This pattern of interaction between the ‘Ndrangheta and African immigrants has led to a large, underpaid, heavily segregated African immigrant population in Rosarno. The impoverishment of Calabria exacerbates the tensions. Whereas in other regions of Italy local Italians scorn the low-paying jobs claimed by immigrants, in Calabria the $30/day that African immigrants make in the orchards is not much different than the income of many locals. The recent economic downturn has been painful for Italy as a whole, but for Calabria and the other relatively poor southern regions of Italy the effect is magnified and devastating. It creates competition between the locals and the immigrants for income, a further potential source of discord between the two groups. Since the ‘Ndrangheta continues to bring in more and more immigrant labor, it is in fact creating competition with the local laborers and indirectly contributing to increased tension.

How, then, did the situation reach this intractable point? Blame rests with the government’s policies on immigration and organized crime, both of which are ineffective and prone to high levels of corruption. Although Berlusconi announced a new 10-point plan to fight organized crime following the Rosarno riots, his words have come to naught. Furthermore, government officials have misrepresented the problem with organized crime in Calabria, and in Southern Italy more broadly, as a problem with illegal immigrant populations. Berlusconi has been known to make strongly anti-immigrant statements, and recently praised Italy’s crackdown on illegal immigration, reasoning that fewer foreigners in Italy means fewer people to fill the ranks of organized crime syndicates. Such a view is a fundamental misconception of the immigrant-organized crime relationship; since the ‘Ndrangheta has a strong family structure, immigrants are not filling the ranks, but are instead a source of cheap labor to be exploited. They are victims, not accomplices. Harsh immigration policies will only drive immigrants into further reliance on the organized crime networks such as the system in Rosarno.

Until the Italian government recognizes the need for serious legislation to provide immigrants with other options than turning to organized crime syndicates for their livelihood, further mistreatment and violence are inevitable. Strong anti-immigration laws will not solve organized crime problems. A strong government push against the power of organized crime will cut off both the illegal activities of mafia families and the avenue for illegal immigration at the same time: Prendere due piccioni con una fava. That is, kill two birds with one stone.

In light of the relatively small fanfare generated by the treaty’s final adoption, questions remain as to whether Lisbon will effect any palpable change and what it means for Europe’s future on the world stage. The Lisbon treaty aims at further European integration and can be taken as a political statement in support of a more interconnected Europe. For all the substantial political capital used to ensure the treaty’s passage, however, the maximalists have nevertheless won an empty victory. Consider current European Commission President José Manuel Barroso’s statement about the opportunity presented by the treaty: “Don’t expect miracles. Lisbon reinforces our capacity to act, but at least as important is our willingness to act.” Nothing better illustrates how politicized and inertial the current state of affairs has become than the highly conservative picks of Herman Van Rompuy, then Belgian Prime Minister, and Catherine Ashton, previously European Commissioner for Trade, to the new posts of European Council President and high representative of foreign policy.

In one view, this “capacity to act” was strengthened by the treaty’s “streamlining” and “simplification” of EU decision-making. In the past, one of the European Union’s main challenges had been its chronic inability to produce a foreign policy consensus among its 27 member states. In the vacuum of any overarching focus, its foreign policy conformed to the whims of specific members. The treaty’s creation of an EU president and foreign policy representative purports to address this problem. Furthermore, the use of frequently paralyzing unanimous votes has been abandoned in favor of majority rule in many policy areas, including migration, criminal justice, and judicial-police joint action. Additionally, Lisbon changes the voting mechanism in some zones to assign votes to member states based on their populations.

In contrast, some critics rightfully question the potentially troublesome sweeping powers of “co-decision” awarded to the still-unfamiliar European Parliament. These include approval of European Commission president and ministers along with partial oversight of the EU budget. The European Parliament now wields influence that is, theoretically, almost equal to the European Council. Many see this as a disaster, pointing to the fact that Members of the European Parliament (MEPs) are out of touch with their constituencies. Relatively few Europeans vote for MEPs, and, as a recent article in The Economist noted, many Europeans do not even know who represents them. From farm subsidies to immigration, some fear that the Parliament will initiate an ill-advised legislative voting spree on narrow democratic mandates. An already prickly co-existence between the European Council and the Brussels-based European Commission will now be tested by the accommodation of another, even more unaccountable body.

Despite supposed policy improvements, no guiding European foreign policy exists. With the lackluster appointments of Belgium’s Van Rompuy and Britain’s Lady Ashton, EU leaders have confirmed that they are content to exert influence only within Europe, rather than on the world stage. The EU has missed a unique opportunity to utilize the Lisbon treaty to redefine a global Europe, which was—in theory—its most significant aim. Business continues as usual, with balance-of-power concerns and the prioritization of national interests leaving the EU with only a secondary role in world affairs. Granted, Mr. Van Rompuy is an avid Atlanticist, but as he has been prime minister of Belgium for less than a year, it is doubtful that he will “turn heads” in Washington, Beijing, or Moscow the way that a more prominent figure like Tony Blair could have. As British Tory leader David Cameron has observed, Van Rompuy is not “president of Europe.” He is a narrower, “chairmanic” figure rather than a promising sign of unified European diplomacy. It was Van Rompuy’s modest stature that garnered him the outsized support of Germany and France.

Lady Ashton was chosen for similarly dull reasons. When asked why she was selected, French president Nicolas Sarkozy replied, “It was felt a woman should hold a big EU job, because a center-left politician was needed to ‘balance’ Mr. Van Rompuy and because ‘our British friends’ wanted the post.” In fact, Lady Ashton was, at best, only the third choice of her own government. To be fair, Mr. Van Rompuy and Lady Ashton had both performed admirably in their previous roles. But this was neither the time nor the place to pick two relatively inexperienced political unknowns for the most public of EU positions, a weak start for a “new” Europe.

Some Euro-conservatives argue that a minimalist interpretation of the Lisbon treaty will actually benefit Europe. They would also argue against appointing a celbrity figure as either president or foreign minister because neither position is directly elected. As Financial Times columnist Gideon Rachman notes, “Ordinary Europeans would be justified in asking by what right the unelected Mr. Blair [for instance] speaks for them.” Yet Mr. Rachman also observes that European unity tends to crumble at moments of international crisis, indicating the necessity of Lisbon’s integrative measures. In principle, the treaty’s main objective was to endow Europe with the political heft to match its status as the world’s largest economy. In all likelihood, it is hard to envision America and China, or even India and Brazil, really respecting Mr. Van Rompuy and Lady Ashton. It is even less likely to imagine Russian Prime Minister Vladimir Putin doing so. During the South Ossetian War, Mr. Putin reserved no respect for even the European Union itself; its lack of a collective security or defense policy made it impossible for Europe to enforce its demands that Russian troops withdraw. In an international political landscape shaped by power interests, Europe needs the fullest potential of the Lisbon treaty to avoid becoming an international afterthought. Instead, this missed opportunity will cement the status quo of EU foreign policy being diluted by national governments. As Henry Kissinger once famously—if anecdotally—observed, “Whom do you call when you want to talk to Europe?”

While Europe searches for its voice, it will remain a spectator in a G2 world molded by America and China, as enunciated by British foreign secretary David Miliband. Admittedly, the European Union has been considered a triumph of diplomacy, having stabilized the Continent and made war unimaginable. In one sense, though, the European project’s success has led to the present difficulty of deciding how to project its considerable political-economic weight abroad. Europe, with the exhaustion following the Lisbon treaty and the lack of future direction it provided, will only gain international respect if it can harness the treaty’s potential and work toward a more maximalist EU.