“Better a horrible end for the Euro than to suffer this endless horror”
Since the Irish became the first turkeys in history to vote for Christmas in the Euro referendum last month, what have we seen from our partners?
The French President has announced that he will lower the retirement age there from 62 to 60. An unthinkable act of fiscal madness in the current era.
The Eurozone denied that Spain’s banks had a problem, then denied that there would be a bailout this past weekend, and then orchestrated a €125bn+ bailout over the weekend. They did the minimum amount possible at the last possible hour.
The Irish get to borrow money to contribute to the fund for the Spanish bailout….
Greece faces fresh elections next weekend and may end up unable to form a government if polls are to be believed.
There are times to “hold your nerve” and stick with transformational ideas that are worth believing in. There are times to realise that you are throwing good money after bad and that by failing to abstract the problem you face to the next layer of simplicity you are prolonging the issue.
The current Euro structure is in that latter realm. Time now to, at least, move to a two-speed Euro so that weaker economies can have some hope of using exchange rates to recover. More likely a series of countries will slowly but surely fall off the back of the Euro-group like a bunch of cyclists puffing their way up a steep alpine climb. They will abrogate their bailout and loan obligations. Their citizenry will start afresh with a competitive chance. It will take years to recover. But at least they can get started and at least they will know it is all for their own benefit and not that of the global banking structure.
Even if the mooted alternative of a more closely aligned Federal Europe were politically deliverable or viable, it is probably still a bad idea for all but the core creditor countries with similar economies and cultures. Simple, really.