"Whatever Germany Does, the Euro, as We Know It is Dead"

[Chris_]

http://www.telegraph.co.uk/finance/comment/jeffrandall/7746806/Whatever-Germany-does-the-euro-as-we-know-it-is-dead.html

Whatever Germany does, the euro as we know it is dead
Angela Merkel's ban on short-selling is just a distraction from the horror to come
 
By Jeff Randall
Published: 7:56PM BST 20 May 2010

Angela Merkel's response to the euro crisis is 'doomed to fail' Photo: Bloomberg
"Money can't buy you friends, but it does get you a better class of enemy" – Spike Milligan

For Angela Merkel, leader of the eurozone's richest country, a queue is forming of high-quality adversaries. As she tips German Geld und Gut into the furnace of a rescue package for the euro, while going it alone in a misguided ban on market "manipulators", the brass-neck Chancellor has infuriated domestic voters, angered her EU partners (in particular the French) and invited the so-called wolf pack of global traders to do its worst.

In one respect, Mrs Merkel is right: "The euro is in danger… if the euro fails, then Europe fails." What she has not yet admitted publicly is that the main cause of the single currency's peril appears beyond her control and therefore her impetuous response to its crisis of confidence is doomed to fail.

The euro has many flaws, but its weakest link is Greece, whose fundamental problem is that for years it spent too much, earned too little and plugged the gap by borrowing in order to enjoy a rich man's lifestyle. It flouted EU rules on the limits to budget deficits; its national accounts were a moussaka of minced statistics, topped with a cheesy sauce of jiggery-pokery.

By any legitimate measure, Greece was unworthy of eurozone membership. That it achieved card-carrying status was down to the sleight-of-hand skills of its Brussels fixers and the acquiescence of central bank bean-counters. Now we know the truth, jet-hosing it with yet more debt makes no sense. Another dose of funny money will delay but not extinguish the need for austerity.

This is why the euro, in its current form, is finished. The game is up for a monetary union that was meant to bolt together work-and-save citizens in northern Europe with the party animals of Club Med. No amount of pit props from Berlin can save the euro Mk I from collapsing under the weight of its structural dysfunctionality. You cannot run indefinitely a single currency with one interest rate for 16 economies, when there are such huge fiscal disparities.

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Balance at link.......

doc

[The Village Idiot]

This isn't about Greece, they were just the first to fall. They are all in the same condition more or less, including the US and Japan.

Trying to blame the whole thing on Greece or banks or "markets" is simply deflection.

You cannot borrow and spend and think everything is going to be fine tomorrow.

[DumbAss Tanker]

Germany got what it wanted in setting up the Eurozone, basically clear dominance as the pre-eminent Central European power, with open access to all of Europe for its market.  It was great when economies were expanding, unfortunately Germany there is always a downside to such transactions, and it has emerged.