End of the Euro ?? Could it really happen

From the Daily Telegraph (are we surprised), but could it actually happen

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4782749/Will-Germany-deliver-on-the-Faustian-bargain-that-created-monetary-union.html

 

Hmmm interesting article michael52, thanks for posting it.

As for can it really happen, nothing will surprise me nowdays.

Bob

Gt.Yarmouth

Edward Hugh (Spanish Economy Watch) has mentioned this several times, the problem is that for all the complaints about the inflation caused by restaurants raising prices the Euro has provided a ton of cover for like Spain and Ireland. One only has to look at Eastern Europe to see what could have happened. In the short term going back to the pesta will do wonders, Spain can seriously evaluate it but long term it will do more damage as inflation and unemployment soars and growth grinds to a halt.

Rob, ditching the euro wouldn't help Spain, even in the short term. Governments need to raise money by issuing bonds (gilts as they are called in UK). Spain  needs to borrow more money than most  to get it through the crisis. Spain (and big Spanish corporations like Iberdrola, Santander, etc)  is already having to pay more than, say Germany, to borrow money because potential lenders think Spain is likelier to default. It costs more to insure a loan to Spain, even though the loan is in Euros. Now, suppose Spain was to go back to the Peseta, do you think that would make lenders more eager to lend? The Telegraph chap, Ambrose Evans-Pritchard has been talking down the Euro for years. The thing is, there's nowhere in the world that's not affected so there's no real reason for exchange rates to go up or down much as they're all equally buggered. Euroland, the USA and UK are all in the same boat. Which is good news as there are no decisions to make.