Wednesday, October 13, 2010

Is the Euro now indestructible?

Iain Martin writes well and interestingly for the Wall Street Journal on Europe, but I would question this statement in his column this week: Several other things now seem relatively clear after the sovereign-debt crisis and the bailout that followed. First, barring an unforeseen explosion, the common currency isn't going to come apart. Any country leaving would have its debts denominated in euros. If it tried to relaunch its own currency it would sink like a stone, its debts increasing dramatically. Such a country would be incapable of funding itself on the markets. And many of those left out of pocket in the resulting disaster would be bondholders in institutions in Germany or France. That will not appeal. These members are locked together. The clear logic of this prediction is that Germany will set the rules for the economic practices of the former states now using the euro currency. The smaller countries' politicians will be inclined to accept this as they are all part of the disgusting self-serving EU gravy train (see my posting of this lunchtime on the Strasbourg Cesspit Blog, linked here). The people of the eurogroup will not voluntarily do so. The general reluctance across the EU to give any political party the reins of power in their neutered parliaments (witness Belgium, Holland, Sweden and the UK) reflects the unacceptability of present trends for the electorates of these countries. Widespread strikes are further evidence of the disgust of ordinary people at the corrupt norm in politics along lines which seem to mirror the EU's own internal, closed doors corruption. If the leading powers of the eurogroup are prepared to enforce their Teutonic mandated economic strictures by the dispatching of their troops to the streets of foreign capitals, then Mr Martin's statement could become true, but if ordinary Germans prove reluctant to return to a role where brute force becomes the sole economic arbiter across the continent, then withdrawal from the EU with a refusal to wear the particular mantle of riot-geared bankroller and enforcer to the feckless could see a German withdrawal from the common euro currency and shortly thereafter its speedy death. An outcome made more likely by another error in Iain Martin's column; the presumption that the sovereign debt crisis in Europe is over, whereas in fact it is only just beginning as my posting eaerlier today on the growing crisis in Portugal makes perfectly clear.



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