Death of the Euro

Britain will again be seen as the wrecker of European dreams as David Cameron vetoes an EU-wide treaty to tackle the eurozone crises. An agreement involving all 27 countries is now dead leaving the 17 euro counties to sort out the problem. Not finding a deal will now put British/Euro relations to an all-time low and possible create a two-speed Europe.

A two-speed Europe is however not guaranteed, and which part of this two-speed Europe will grow the fastest? Mr Cameron’s insistences that the UK financial services should have exemptions show the UK government faith that the financial sector will lead to future stronger growth in Britain.

To be fair Mr Cameron was in a ‘rock and hard’ place. Signing up to a treaty that many in his own party would have voted against would have left his leadership in tatters. Many in his own party agree with the statement by Boris Johnson this week that we are in danger of saving the cancer and not the patient’ concerning the Euro. Many MPs in the Conservative party would like the whole European project to die a horrible death and once and for all be put to bed. France and Germany in protecting their own interests are trying desperately to keep the Euro and European project life-support switched on.

At the end the life line of the whole European project may depend on the markets. With a compressive Euro deal now off markets are act very nervously that the Euro can be saved. Credit agency Moody has responded by downgrading French credit rating to A1. It is very possible other Euro countries will follow making borrowing for these countries more expensive.

Comment: Germany and France are fogging a dead horse. I can see why, the idea of a ‘European Super State’ was always their dream. They will fight for the survival of Euro and European dream with every last drop of German and French money even if that bankrupts their own country and leaves Europein tatters. It now up to other countries to save Europe!

The problem for all countries in the Euro is that they can’t de-value or print money to help their economy and any countries thinking of joining have to be fools. It is completely clear that those countries outside the Euro are in a better position the weather the global financial storm. The solution of France and Germany and tighter controls and more legislation on national governments that can’t or should not even be in the Euro. Punishing them may seem good in the eyes of the markets but does little to help the problem country.

Amongst some economists there is a growing realisation that the European project and the Euro are not worth saving. Deep down many agree with Boris that the Euro is the cancer and that both Germany and France should be looking for a way countries can exit in an orderly manner. I believe that this will not happen and we will get a disorderly and chaotic breakup more damaging for every country involved.

The British people have never been a fan of European integration, we like our Spanish holidays, our Belgium beer, our French wine but we don’t want the share our currency, our borders, most Brits will be happy the see the end of the European project.


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