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And now Portugal falls…

“So far, George Osborne has taken the comfortable line that the eurozone meltdown is nothing much to do with Britain. As a result, he has chosen not to question the shoddy compromises, the straight lies and the probable illegality that have characterised Europe’s response to its greatest financial and political crisis since the 1930s. But the disaster will hit us, too. Britain is a shareholder in the ECB, and Britain is a core part of the bail-out mechanism. It is time that we started to poke our nose in, to demand honesty and transparency, and to stop sending good money after bad. Above all, George Osborne has an urgent duty as Chancellor to construct a firewall that protects Britain as much as is possible from the catastrophe that now looms over Europe.”

Peter Oborne.

For many months and years, commentators – many of them at the Daily Telegraph – have predicted the eventual collapse of the single European currency. So far, it has failed to happen, if only due to the fanaticism of the European political class. But maybe, just maybe, the endgame is upon us. This is going to be nasty; some big banks could have to write off a huge amount in the way of bad loans.

And to think that a few years ago, it was claimed that the euro could rival, or even overtake, the dollar as a reserve currency. I am still a dollar bear, but who would want to bet on the euro?

I remember reading this book, The Rotten Heart of Europe, when it came out, and its author has that dubious pleasure of being able to say, “I told you so”.

8 comments to And now Portugal falls…

  • lucklucky

    The rotten heart of Europe includes England. Actually i think that England is even more rotten due to Political Correct mantra that didn’t entered Latin countries so much.

  • Laird

    If Portugal falls (as it appears to have done), can Spain be far behind? And if that happens, can anything save the Euro? I can’t see it. I suppose that would be “good” (in a very perverse sense) for the dollar, but only in the very short term. Ultimately, we’re all in this together.

    I think Johnathan is correct: the endgame is upon us. What happens then? I have no idea, but it can’t be pretty.

  • lucklucky

    Now we are in extend and pretend, kick the can down the road expecting the mythical growth that will start always in next week.
    My country was contaminated by Socialism and even after all lies from Government they are all still socialists.
    The Government and Opposition.
    The opposition talks about growth of 3 and 3,5%
    as escape, they are deluded like the liar in chief Sócrates.
    No one can conceive a 0 zero Deficit.
    It will be inevitable but no one can conceive it : politicians, economists, journalists.
    Their brains are modeled in deficits even if they aren’t sustainable any more.

  • hovis

    I have occaisionally harboured thoughts war would return to continental Europe within 30 years, perhaps I should revise my time line .. I hope not and it’s just a febrile thought that pops up during in moments of pessimism.

  • John B

    Yes, luckylucky, the rotten heart does include England.
    I always try to remember that institutions, such as countries, have no real existence other than the people who run them.
    And the people who run Britain are also among the people who run Europe.

  • And the people who run Britain are also among the people who run Europe.

    The two groups are almost indistinguishable. And the group of people who run my native land of Australia are indistinguishable too, although there is no EU to blame.

    God, it is depressing.

  • I lived in Spain during Gonzalez and Aznar. Foolishly, as I saw motorways roll out across the plains, buildings shoot up, high-speed trains whistle past, and cool graphics appear on TV news intros, I thought that some seriously good country management was going on. Now I realise that “economic miracle” means what it says. A miracle is something that defies the laws of nature. Spain is a mirage floating over the quicksand of unredeemable loans. I hope there are still people around there who know how to steer a donkey.

  • Paul Marks

    The government of the United Kingdom has failed (in spite of warning after warning) to get us out of any connection with either the ECB or with bailouts for Eurozone members.

    Nor (contrary to the propaganda) has the government of the United Kingdom really done anything dramatic to deal with out of control government spending. In spite of crushing taxes (50% top rate of income tax, 20% sales tax and so on) the deficit here is at least as bad as in Portugal.

    The whole British political class has failed.

    Their only “success” is in the “confidence” game – in pulling the wool over the eyes of the bond traders.

    And that success will not last for long.