my bet is on Italy, my adopted "second home." Thank heavens they want to dump the Euro! the lira was so much more beautiful....

David, I dunno how much of the news you have seen today, but the euro dived in the foreign currency markets against the dollar and the pound. The markets take it seriously that Italy might want to leave.

To say that we live in interesting times is to put it mildly.

So what does this mean for personal liberties in those EU countries if they cut and run?

The joke is that a lot of people are against the Euro because of the central bank's supposedly "tight money" policy.

Actually (as anyone who looks at the back pages of the "Economist" can see) the central bank is issuing Euro credit-money at a very fast rate - its policy is certainly not "tight".

How does this affect personal liberty? Well if there are lots of currencies there is a least a chance that one of them will not be inflated by the govenment (at least not so much) and inflation (increase in the money supply - NOT increase in the "price level") is the source of the boom-bust cycle. Looking at another nearby country is a good way to check how bad their government is - if things are under the control of a Europe wide state then comparisons are more difficutlt - and limiting statism is more difficult.

In short a centralised Euro monoply is even worse than lots of different fiat currencies (the fiat currencies of the nation states) - more ripping people off (via the inflation of the money supply) and more distorion of the economic structure leading to booms and busts - and all the demands for statism that the busts lead to.

It'll be either Italy or Germany. Italy because it's the first to openly think about it, Germany because it needs a softer currency as a quick fix to attempt to jump start a backsliding economy.

It would be even more interesting if there were mention of adopting a real gold standard somewhere.

Good article from Charles Moore today:

EU dreamers get a reality check - what's in store for Italian euros?

In an article about the problems of the euro, the German magazine Stern advised readers to check their euro banknotes. The notes issued in Germany, it explained, begin their serial numbers with "X"; those issued in Italy begin with "S". Hold on to the former, was the suggestion, and get rid of the latter while you can.

Another interesting article in today's Independent:

How we were talked into joining Europe

When I filmed 30 years ago at the HQ of the "yes" campaign, I saw graphic evidence of the disparity in funding between the two campaigns. The sloaney figure of Caroline de Courcey Ireland told me how she was organising plane-loads of pro-European speakers from all parties across the country to be flown for briefings by top level Eurocrats.

"We chartered a series of 100-seater jet planes from British Caledonian airlines - and all those nice little girls in their kilts. We took nearly 1,000 in all"

And where, I asked her 30 years on, had the money come from? "From the European Commission: it was a sort of special dispensation. I don't know how they fixed it, because one didn't ask too much. One just said 'Thank you very much' and got on with organising it."

Michael Cockerell's film 'How We Fell for Europe' is on BBC2 at 8.25 tonight (4th June).

If Italy left the Euro, it would be in the same situation as Argentine. Their problems, as well our own here in Germany, are self-inflicted.

Btw, personal liberties have nothing to do with the European Union or the Euro, for the individual member states, including Britain, do to the citizens whatever they please; should said measures prove unpopular, the govenments in question wil claim that Brussels made them do it. That way they can deflect the negative sentiments from themselves, and they even
get to keep the measures in place, for the protesters are too busy raling at the EU to get anything done bout them.

Btw, David:

A leader of the euroskeptic Northern League party, Maroni appeared to realize his proposal, made in an interview with Rome daily La Repubblica

You know that the ultimate goal of the Northern League is to have Northern Italy secede from Southern Italy?

Maybe the question should be who will be the last to leave the Euro? The Euro notes do not have a signature on them - I promise to pay the bearer teh sum of..... signed Chief Cashier.

So what does this mean? If the Euro collapses do we all get left with load of scrap paper. Is no-one underwritinmg this currency, or does the last one to leave take on all the debt.

It certainly will not be France or Italy that pick up the tab.