This was the title of an article published two weeks ago by online trend analysts, Precogz.
Not long ago, as we reported at the time, economic commentator Andrew Alexander came out and said that he did not believe that the euro would exist in a years time.
A a few weeks ago a financial sector expert gave us a benchmark rate for the euro against the US dollar which, if it fell to that point, would signal serious and possibly irrecoverable trouble for that currency.
It reached that figure on 14th May and has since progressively fallen below it. There have been fleeting and minor recoveries but not to within reach of the benchmark level.
We read as frank warnings the unusually unequivocal statements issued in the last 24 hours by the Governor of the Bank of England who talked of a financial storm coming towards the UK from a eurozone which ‘is tearing itself apart with no sign of a solution’; and from the Prime Minister, who talked openly in the House of Commons of the need for the eurozone now to make up its mind to ‘make up or break up’.
There is widespread acceptance of the fact that Greece will default and leave the euro, sometime after it goes to to the polls again on 17th June, having been unable to reach any agreed position after its recent election.
Such an event is broadly agreed as likely to signal pressure upon the Spanish and Italian economies which there is no secure belief they will be able to withstand.
The phrase ‘eurogeddon’ is gaining currency,
Greek money is currently moving out of Greek banks and being lodged in sterling deposits in London. This is a protection against the possible return of the Drachma, following an exit from the euro.
The BBC has reported that a town on the border of the Republic of Ireland and Northern Ireland, Clones, has single-handedly reintroduced the Irish Punt in preference to the euro. The Punt has no formal value but can be exchanged in Dublin.
The overall picture is one in which we have to acccept that we are likely to be on the brink of a financially chaotic period where the pressures will be enormous and no one really know how the scenario will play out.
The real point to come out of the last four years is that this potential maelstrom arises because of a conspiracy of the European politicians who were determined to create a “United States of Europe”,dominated by the French and the Germans. Starting with the highly acceptable Common Market, which merged sovereignty easily because no State had sovereignty over their dealings with other States the plan had got to the stage where it needed a currency, because that is one of the fundamentals of a modern State. This was sold to all as saving travellers the 3% (and more) the banks got every time you crossed a border. But the essential feature of a stable currency – being the fiscal and monetary Union of the parts (Counties,members,states) using it was left out, since that could not be sold to all the members who had to join.
Ten to fifteen years on, the chickens come home to roost and the members are told that the only way to stop disaster is to accept that fiscal and monetary control which was actually required in the beginning.And even if that is accepted, and it is not by the first voters asked (Greek and French) it may be too late. And the results may extend to those tied to the trading block which we joined in the first place.
All because someone knew that a common currency would produce the “State” they wanted
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I recollect the saga kicked off earlier, with something called ‘the European Coal and Steel Community’ (nowadays it might be called the Indian and Thai steel community).
I can’t remember thinking the ‘European Project’ anything but wonderful until one fine day we were all told that the notes of the common Euro currency would be truly common, illustrated with truly Euro scenes, to avoid any confusion. Hmm. Living in a country where individual banks produce individual bank notes, I could have sworn that people had no apparent difficulty in using them – and were in fact proud of their varied currency notes. Which left me wondering what was inside the brains of the Eurocrats? Eurocrap?
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The ones who thought up the Euro were clear that this was a step towards their “United States of Europe”
But they couldnt sell it all at once. So from the Coal and steel Community we moved, reasonably, to the Common Market – a more easily negotiated European version of the WTO – then added all the other things on the basis of their connection with Trade (much as the US developed their federal controls on the back of “inter-state commerce”)
Many (10) years ago I said I was in favour of Europe coming together but not in the way it was moving, and certainly not in establishing sovereignty over fiscal and monetary matters – only in areas where no country has sovereignty like trade and global warming.
I dont know whether Schuman, the inventor of the start would approve of where it has been taken. The results of the last few years are liable to break up the entire joint enterprise.
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What is a Dollar?
What underpins it?
At one time the Dollar was linked to gold but that failed, so now it is just a paper currency that everybody “agrees” is acceptable. The Dollar is no more meaningful than the Euro, indeed less so. The fate of the pound is tied to the fate of both the Euro and the Dollar – tough times ahead.
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