Euro Crisis Contagion Reaching Epidemic Proportion

    • The US equity markets have pretty clearly said they won't care about this stuff until it proves the damage it can do to the US economy.

    • It will be at least a decade before the damage can be repaired. The Euro is finished. The core members, the so-called "Lutheran states" should quickly band together and push out the others. Otherwise, they'll go down with the ship. We have a tragedy in the making, a slow motion train wreck.

    • Austria is no "Lutheran" state but catholic...

    • I know this seems like a smart arsed comment, but I have been saying from day one of the euro idea in January 1999 that this could never ever work in the long term. It started off with “fixed” exchange rates between member countries currencies. These fixed exchange rates were allowed to float relative to each other within limits. Then in January 2002 the euro coinage, and notes were introduced, which by their introduction took away this float mechanism. This meant that all euro countries had to operate a “one shoe fits all” financial policy to ensure the value of the euro in their respective country. This is where it all went wrong, because of the diversity of economies across Europe. Some economies were based on manufacturing, some on farming, some on tourism, some on banking, and so on, plus combinations of the above, along with other areas. With such widespread diversity in the way the different countries economies were based, it made it impossible to have a “one shoe fits all” financial policy. So, for me it comes as no surprise to see the euro in crisis. If anyone thinks the euro can continue they are wrong.

      In Marin Essex’s commentary he says that it is not just the “peripheral” euro-zone countries, such as Italy and Spain, Greece, Portugal and Ireland, who are struggling, but also to countries such as France and Belgium. He goes on to warn that Austria, the Netherlands and Finland face problems, and even Germany have been hit. The reason for this is that each and every country needs to hold the value of the euro by borrowing, but where does this borrowed money come from? Certainly not China, India, and the USA, who have their own problems. The IMF is charging high rates for borrowing, with Italy at over 7%, and several other countries in the 4%, 5%, and 6% bracket. The simple truth is that most countries cannot afford to Tax their voters, and business’s enough to meet these high interest rates, because this stifles growth, which is exactly what is needed. So, the only conclusion is that the euro is dead, and the European leaders, particularly Germany need to revert to the original aim of the EU, which is to have free trading agreements across Europe, along with agreements in other areas. The facts are that the voters across Europe do not want to be dictated to by Brussels as to how they should run their economies, and they want to see democracy returned to their own countries, where the elected Government represents the view of the majority.


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