All those rosy forecasts in tonight's Australian budget are predicated on what is happening to the financial system in Europe being, as Wayne Swan described it, simply aftershocks of the world financial crisis - unsettling and annoying smaller versions of the real thing but not something that is going to disrupt our own recovery. Oh that it is so but there are good reasons to be more pessimistic than our Treasurer.
The more you look at what is happening in Europe the more it appears that the $US1 trillion pledged to help countrties under stress is really all about saving the banks that have lent the countries the money they are having difficulty paying back. If the rescue plan does not work then banks will be going down the gurgler and the world banking system is again going to freeze. And the consequences of that are something that Australia will not escape