Greece is going to default on its debt sometime.
This is obvious.
It’s obvious to commentators, politicians and citizens.
The reasons are many and varied but it was surely also obvious to anyone that the solution for the Euro was to remove Greece from the currency and allow a managed default?
Instead, by their decision yesterday to make a further bail out, the German Parliament has just set up the dominoes.
If, as now looks increasingly likely, the great Euro experiment fails and countries go back to their own currencies, these will be devalued quite seriously. Their purchasing power will be a fraction of that of the currency they have replaced.
Writing here last November I made a comment to a correspondent who had linked to an article that the crisis made Britain joining the Euro more likely, I said the following:
I actually had the paper but only just read the article. Ian McWhirter is a smart cookie and whilst I agree with him on many things I feel that in this particular article he is working on many assumptions of how governments will behave.
In brief my view is this:
1) The switch to the Euro has coincided with the biggest debt crisis in Europe in living memory. Maybe there is no connection between the two but you know how people think.
2) At every limited opportunity (save for the staged re-run in Ireland) the citizenry have had a chance to offer their opinion on the closer integration of the EU, they have rejected it.
3) France and Germany despite being the pivotal axis on which the Union revolves are going to expose their own economies to huge risk in sorting out the “PIIGS”
4) As people struggle with economic hardship they might actually sit up and take more notice of the pish that rains down on them from Brussels and they will be holding their domestic governments more to account for that.
The consideration of these particular components lead me to conclude that the notion of the end of the crisis seeing the Euro survive in its present form and Britain joining it, are far off if not far fetched.