Will the Euro survive the economic crisis?

[sasguru]

The market seems to be pricing in a significant risk of the Euro not surviving as bond yields diverge:

http://www.aei.org/publications/pubI...pub_detail.asp
http://1.bp.blogspot.com/_Z04FnvYygy...0-h/bonds2.jpg

"The current differences in the interest rates of euro-zone government bonds show that the financial markets regard a break-up as a real possibility. Ten-year government bonds in Greece and Ireland, for example, now pay nearly a full percentage point above the rate on comparable German bonds, and Italy's rate is almost as high."


My own thought is that Spain is the weakest economy in Europe by a long way and it may decide that they cannot let the ECB dictate economic terms. Germany would probably welcome this (and Greece, Portugal and Italy leaving too) leaving the "Euro" as the default Franco-German currency.

[AtW]

The market seems to be pricing in

Yes, and we all know how correct those markets are.

[BlasterBates]

As the report suggests one or two banana republics may choose to leave the Euro-zone, and follow Argentina's lead in impoverishing its population to pay off government debt, but the Euro will survive.

[sasguru]

Luckily I can't see the latest cretinism that the twat has responded with as he's on my ignore list

[zathras]

Judging by Brown's success with the Bank recapitalisation and the VAT reduction the Euro will survive until about 2 minutes after he announces that the pound is to be replaced with it!

[AlfredJPruffock]

Agree broadly with with SG on this one - by March the Euro will come under íntense pressure especailly as German unemployment starts to accelerate and France falling deeeper into recession - I anticipate Sterling to recover 10-15 per cent against the Euro by that time.

I predict Social unrest in German manufacturing cities this Winter

The Rouble will gain even more - perhaps up by 25-30 per cent -it is way undervalued given Russias potential.

Grey Slates remain - Grey Slates.

[AtW]

Grey Slates remain - Grey Slates.

Quite. That's why Russian Central Bank lost 25% of its hard currency reserves in the last few months and that's why they started new policy of devaluing ruble. In November Russian budget lost 30% of its revenues - that's just a start.

[d000hg]

If the Euro collapses that's hardly optimistic for the pound and US dollar though, is it...

[AlfredJPruffock]

If the Euro collapses that's hardly optimistic for the pound and US dollar though, is it...

True - you see its pretty clear here from the Planet Gong - all the Fiat currencies are pretty much doomed - its all simply question of time ... da ran da dah - World Government to the rescue with Global single currency.

International Currency Markets - No place for a Gentleman


One currency to Bind them All
and One Government to Rule Them


Perfect ....


Give me control over a nations currency - then I dont care what laws they may make

Rothschild

[Francko]

leaving the "Euro" as the default Franco-German currency.

I am not German.