I’m always a bit surprised at just how slow the MSM are on the uptake to what people have been saying for a couple of years now. Though admittedly some notables were two decades in advance, but it’s far more difficult to predict actual events that long ago. Or was it…
THE crisis-hit euro is teetering on the brink of collapse, the International Monetary Fund acknowledged for the first time yesterday.
In a significant vote of no-confidence, a report from the global financial organisation admitted the troubled European single currency had “flaws” and was at risk of a “disorderly default and exit by a euro area member”.
And it warned that a euro meltdown could be even more devastating for the world economy than the 2008 credit crunch. The admission in the World Economic Outlook from the IMF came amid renewed fears that Spain could soon follow Greece, Portugal and Ireland in accepting a multi-billion pound international bail-out.
The report warned: “The potential consequences of a disorderly default and exit by a euro area member are unpredictable and thus not possible to map into a specific scenario.
“If such an event occurs, it is possible that other euro area economies perceived to have similar risk characteristics would come under severe pressure as well, with a full-blown panic in financial markets and depositor flight from several banking systems.” It added: “Under these circumstances, a break-up of the euro area could not be ruled out.
Back in the days of Maastricht, it was possible to see that the criteria for entry to the euro were not being met by all the original 11 countries trying to make a go of it, indeed as far as I remember only Luxembourg actually met all 5 of the criteria, certainly not Germany or France, which should really surprise no-one, after all, the purpose of the euro wasn’t just fiscal union, but ever encroaching political union. A fact that seems lost on the rank and file of the Tory Party, who also conveniently forget that other than Lisbon it was their party at the forefront of all major treaty signings.
That was always the game plan, some form of socialist style united states of Europe, always denied by the elite, but always on the cards. Yet the very way they went about it was doomed to failure, taking the USA dollar as an example and seeking to emulate its international standing they roped in the disparate economics of 11+ countries and set up a common currency with fixed interest rates and a monolithic control system to monitor it. Forgetting that there is essentially one culture in the USA, people and businesses behave more or less the same across the US, having a common language helps too. As for political union, they also forgot that the American civil war wasn’t about freeing slaves, but about states rights over the federal government. It’s not for nothing that the ACW is known as the war of northern aggression, in the Confederate South, it was about economics, not people.In part this explains the anger in Greece, Spain, Portugal, Ireland and perhaps Italy. Where national interests are over ridden by international ones and the number of bailouts required has overcome the ability of those states with some spare cash to pay out any more.
In essence, the euro because of the way it was born, nurtured and abused was doomed to failure. That it lasted this long is nothing short of a miracle, I doubt it will last much longer in its current form.
Then again I never thought it would last this long…