November 8, 2011
Those that know me personally will likely have heard me say that economically the euro is a bad idea and everything will go wrong eventually. I have been saying it for years.
Luckily for me, I have never been pressed with a question such as, “How will it go wrong?”. Something tells me that, “A sovereign debt crisis in Greece” would not have been my first response to that question…
However, I have always admitted that the euro was a political masterstroke. It united much of a continent in a way that few other things could have, except perhaps the Schengen agreement. And I truly believed it was a masterstroke, but now I must come to the conclusion that it wasn’t after all.
In the last twelve months or so, the euro has caused some pretty hairy moments for politicians in Greece, Portugal and Ireland (obviously), Finland, Slovakia, Germany, France, Spain, Italy and the UK – and those are just the countries I can think of. There must be more.
Fortunately for us (now) many of these changes in leadership will not happen until 2012, but there must be a very real chance that a government will be elected somewhere on a platform of “No to the euro” and all this hard work will be wasted.
It must be in the minds of people such as Merkel and Sarkozy that as hard as they work to save the euro, it will not help them. In fact, the more successful they are at saving the currency, the harder their jobs will become at home. It might well even cause the end of their political careers.
We Brits call this being trapped “between a rock and hard place”.
It does beg the question that many leading politicians of a previous generation ought to have been advised that something like this might happen one day. But still they pressed ahead. Is this the true measure of political leadership? Pressing ahead in the face of a possible calamity one day on the basis that it will happen to someone else many years from now? Were they all thinking about their “legacy”?
Has the euro been a fairweather currency? Like a classic car, it works wonderfully and the experience is great on a clear, sunny, summers day with the roof down and the wind in your hair. But should the weather turn, the car is too fragile to be risked in heavy rain, frost or snow. I fear that it might be.financialguy