Monday, 20 August 2012

Apres la canicule, l'Euro

Richard North, on EU Referendum, and Christopher Booker in his Telegraph column yesterday, report on recent events within Germany, largely unremarked in not only the British press but elsewhere. The tectonic plates have shifted, and today we have a Germany no longer prepared, as Mr Draghi promised, to save the Euro at any cost. 

In France, La Figaro also does its best to ignore the Euro crisis; the canicule, or heatwave, is bigger news. Le Monde reports on new figures for Spanish banking bad debts on housing; now up to 10% of the banks' loan book, €164 bn. This is only the tip of the iceburg. As I have commented before, the OMV (open market value) of Spanish property is about half the value that the banks hold on their books.

And I can't find anyone still arguing that Greece needs to stay in the Eurozone. Grexit is a done deal, the only question is when. Back in June, I opted in a comment on C@W for a July collapse; clearly I underestimated the grasp on life of the doomed single currency, but this is at a terrible human cost. Self-murder has joined malnourishment as being unremarkable in Greece. 

Meanwhile, Der Spiegel reported on a French Academician's insight into the coming process that carries a note of verity. Just as the assassination of an Archduke in Sarajevo set in motion a process of Europe-wide mobilisation and deployment in accordance with fixed rail-transport plans, a process that monarchs and governments were almost wholly powerless to prevent once in motion, so the systems in place in the banks will react automatically once the process starts of the Euro unravelling, and until it plays its course, governments and central banks will only be able to stand by and watch. 

5 comments:

DeeDee99 said...

It seems like we have been waiting forever for the Fat Lady to come on stage.

September is usually the month for things to 'kick off.' I wish they'd just get on with it now.

So tired, tired of waiting
tired of waiting for you, hoo, hoo.

Budgie said...

18 months ago I noticed eurosceptics, including from time to time Richard North, starting to claim that the euro would collapse imminently. This was absurd and I said so.

And it hasn't happened. Not least because those at the top of the euro tree will do absolutely anything, at whatever cost to others, to keep the euro alive.

I can now see Greece being ejected "imminently" (sorry, I mean in the next 6 months). This will be portrayed as punishment for Greece. No other country wants that outcome. So there will be no contagion.

Portugal, Eire, even Spain, will get it: toe the line or be cast into the void. The euro will be strengthened and will still be around in 12 month's time.

Anonymous said...

Budgie, everyone is sick and tired of waiting for the inevitable. But I do think the inevitable is coming closer as there is just no money left. http://www.zerohedge.com/contributed/2012-08-20/draghis-bazooka-will-fire-blanks-just-paulsons-did-2008
The Euro rest assured is doomed, unless Germany and the other rich Northern countries leave it to the PIIGS plus France and perhaps the east, in which case a rapid devaluation will perhaps enable the most indebted countries to cut their cloth accordingly and become more competitive again. But long gone are the days of new BMW’s, Merc’s and Audis etc lining the streets of Southern Europe.

Bill Quango MP said...

we were all caught out by the stubbornness of the Euro.
It just keeps surviving.

the only solution seems to be to lure it into a blast furnace, spray it with liquid nitrogen, shatter it, and then tip the remains into the molten metal.

Budgie said...

BQ, no, we were not all caught out. And that was film not theatre.

However Richard North keeps wittering that the euro is only kept going by "theatre". Sometimes theatre is all that's necessary.