DOOM: Collapse of the euro is 'inevitable'

[Nictoshek]

The European single currency is facing an 'inevitable break-up' a leading French bank claimed yesterday. Strategists at Paris-based Société Générale said that any bailout of the stricken Greek economy would only provide 'sticking plasters' to cover the deep- seated flaws in the eurozone bloc. The stark warning came as the euro slipped further on the currency markets and dire growth figures raised the prospect of a 'double-dip' recession in the embattled zone.

Collapse of the euro is 'inevitable': Bailing out the Greek economy futile, says FRENCH banking chief

[karl]

I think perhaps the French folks in question are crying wolf too soon, or perhaps they have been on the side, using bank assets for backing with use in the speculation market. And if caught, will be brought forth to pay the devil for indiscretions...

But to not belabour the point. It is the Maastricht Treaty of time past that will prevent bailing out Greece from the troubles.

www.ansamed.info/en/top/ME11.XAM10371.html

What could happen though, is the forgiveness of their foreign debts to each respective state.

I have heard some nasty floor talk though on our side of the mountain.. The Greeks may be let off the hood on these debts, but will still be accountable for previous contracts for delivery of some very expensive weapons purchases.

Time will tell for the eventual out-come

Karl

[kaima]

Back in the 80's with Reagan's debt I was wondering if the USSR or the USA was going to collapse first. I am happy to see it was them... but then the irresponsibility has been carried on and . . . here we are today.

Even in the 80's I figured the world was too scared to call in our debt, because if we defaulted the world would follow in collapse. It has been a lot of fun on play money in the intervening years. I wonder when the politicians of both (or all three??) of our parties will start to show some responsibility instead of 20 second sound bites. I do believe that spending in recessions is correct for governments, and in times of prosperity we should pay down the debt and even carry a surplus...

[Nictoshek]

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts. As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.

Wall St. Helped Greece to Mask Debt Fueling Europe’s Crisis [/color][/url]

[Jaga]

I read that they want to take Greece out of Euro.

[Jaga]

Here is more about so called PIGS: Portugal, Ireland, Spain, Greece and Italy:
en.wikipedia.org/wiki/PIGS_(economics)

[Jaga]

Too early for EURO?

here is an interesting article by Paul Krugman:

www.nytimes.com/2010/02/15/opinion/15krugman.html?em

I’ve been troubled by reporting that focuses almost exclusively on European debts and deficits, conveying the impression that it’s all about government profligacy — and feeding into the narrative of our own deficit hawks, who want to slash spending even in the face of mass unemployment, and hold Greece up as an object lesson of what will happen if we don’t.

For the truth is that lack of fiscal discipline isn’t the whole, or even the main, source of Europe’s troubles — not even in Greece, whose government was indeed irresponsible (and hid its irresponsibility with creative accounting).

No, the real story behind the euromess lies not in the profligacy of politicians but in the arrogance of elites — specifically, the policy elites who pushed Europe into adopting a single currency well before the continent was ready for such an experiment.

....
And there’s not much that Spain’s government can do to make things better. The nation’s core economic problem is that costs and prices have gotten out of line with those in the rest of Europe. If Spain still had its old currency, the peseta, it could remedy that problem quickly through devaluation — by, say, reducing the value of a peseta by 20 percent against other European currencies. But Spain no longer has its own money, which means that it can regain competitiveness only through a slow, grinding process of deflation.