… so says the doomsday professor Nouriel Roubini. (Medicine for Europe’s sinking south) Greece is bringing it down by its uncontrolled debt and deficit and unwillingness or inability to do anything about it. Greece just refused the IMF demands and told the rest of the EU to mind its own business. Not that it is the first time the Euro has been declared doomed and I should imagine the Greek economy was too insignificant to bring the whole Eurozone to its knees. Besides my trust in various US economy professors is not what it used to be – but this one apparently has a better than usual track record. Last week another commentator thought that it is not Greece but Spain that is the ticking bomb under the Euro.
Is it the end of the Euro? And if that was in the cards wouldn’t a more likely outcome be that the stronger core Euro economies centered around Germany would continue an Euro sheared the weak South European nations rather than abolishing it completely and return to the D-Mark?
Nonsense. Europe is strong. The dollar is doomed. Doomed. DOOMED.
Remember, all the gangster rappers are singing about how they want their Euros, and that means something!
More seriously, I’ve actually been fairly impressed how the single-currency area of Europe has been surviving this. If nothing goes horribly wrong… and Spain and Greece are two places it might, the Euro will have survived its first real major catastrophic test.
Wow, I didn’t know that. It wasn’t too long ago (a couple/few years, perhaps?) where I was reading about how robust Ireland’s economy was becoming, particularly with regards to its technology sector, etc.
But how do you get there from here? Germany can return to the D-Mark unilaterally, if it were to so decide. Can it force Greece and Spain out of the Euro if they don’t want to go? I don’t know what the rules are.
We had a booming economy in the early 2000’s that was based on real growth and investment. Then we went a bit crazy and started a huge property bubble. Everyone started buying 2nd properties etc. for rental. House prices went through the roof. One bank (Anglo-Irish) started loaning huge amount(800 million to 5 people for example) to developers with little to no security. Other banks followed them and before long the whole economy looked healthy and rich but under a very thin surface there was nothing securing anything.
Now the bubble has burst and the government has no money and very little tax coming in as the job market fell apart. A lot of the immigrants are going home and most people who still have jobs had to take a pay cut (e.g. 10% of my firm was let go and we all had to take a 10% drop in money).
Even civil servants have taken a hit and now strikes etc. are on the cards.
In theory, the Greeks have a program to reduce their deficit to the “allowed” levels. The problem is that there’s no guarrantee they will actually do it, and if they do it’s likely to kneecap their very-shaky economy (possibly leading to a default anyway), and even if that doesn’t happen the Euro-zone is simply too complex for a single currency to meet everyone’s financial needs.
They probably should have gone with a triple-currency system, with multiple currencies for developed, developing, and post-communist economies.
