The euro was doomed from its inception. How do we know this? It is certain because all such attempts at monetary union fail sooner or later. The fact that the euro has lasted as long as it has is no more than a function of the arrogant, blind, pigheaded political will of the elite in charge of the operation, notably the amazing Mario Draghi, president of the European Central Bank.

I describe Mario Draghi as amazing because he uttered a few words in July 2012 which the world has treated as holy gospel. In that month the Euro was on the brink of an abyss – for example, bond yields in Italy and Spain were at an intolerable 8%. What he said was this:

We will do whatever it takes to preserve the euro, and believe me, it will be enough. – Mario Draghi (pictured)

The effect was magical, and indeed has lasted to date for an astonishing four and a half years. God alone knows why.

So, the Euro will implode, and the sole issue is when that will happen. Even well thought out and carefully planned monetary alignments fail sooner or later. The most successful example of such a scheme in the last hundred years was that set up in Bretton Woods, New Hampshire in 1944, on the basis of a ‘movable peg’ international protocol. It lasted beneficially for 27 years, right up to 1971 when USA President Nixon took the US dollar off the gold standard.

The EU made two attempts at a similarly flexible system, the first being the short-lived ‘snake in the tunnel’, which very few people remember now. The second was the infamous Exchange Rate Mechanism that the UK joined in December 1990, only to crash out of it spectacularly on Wednesday 16 September 1992 – for the ERM itself to ground to a messy halt not much later.

I was genuinely astonished when, in 1999, the Euro was launched. Why did the eurocrats think that when two flexible systems had failed, the cure was an infinitely fixed one? Moreover, there was virtually no economic planning at all in the creation of this monster. For example, without ‘genuine’ Eurobonds, viz. mutual debt sharing among all the participating nations, it could not possibly work; and Germany was never going to agree to that notion, in any event.

Of course, while times were good, the Euro seemed to work, and all the participating nations basked in Germany’s economic success. Then came the world financial crash in 2008, and huge cracks appeared. In 2009 it became clear that Greece was hopelessly insolvent, and the ‘Greek crisis’ began. The situation in that country has since been getting worse daily; Greek youth unemployment is at 50% and the national debt is now a staggering 360 billion Euros – none of which will ever be repaid, obviously. The IMF, EU and Greece have reached a complete impasse as to the way forward, and things will come to a head (again!) in July when the country has repay over 4 billion Euros – money which the country simply does not possess.

Italy and Spain now face critical banking meltdowns, both of which will probably happen this year, with catastrophic consequences for the world in general, but particularly the European Union.

Even Eire, the ‘blue-eyed boy of the bail-outs’, has no intention of ever repaying any of the 80 billion Euros it borrowed, just as Portugal will never repay any of its bailout fund.

Meanwhile, in Germany, the population is rapidly becoming fed up with paying out huge amounts of money to its profligate southern neighbours.

And, of course, the EU will lose the UK’s net contribution of some £160 million a week which continues until the moment of Brexit actually occurs . . .

Hmm.

Print Friendly, PDF & Email