Most of the non-financial Dead Tree Press has been so focused on the election that they haven’t noticed that Europe’s financial markets are in meltdown, the euro is plunging and a spectre is haunting Europe — the spectre of sovereign collapse. All the powers of old Euro have entered into a holy alliance to exorcise this spectre:
The latest down-payment for the euro-project is a €14.5 billion bail-out of Greece propped up by Germany, France, Italy, Spain and six other EU countries. The German banking sector is thought to have a €34 billion exposure to Greece, panic has hit not just the euro, but the banks hitherto lauded by the likes of Will Hutton as paragons of financial rectitude so unlike the risk-taking City of London.
The German authorities are in panic and have banned short-selling in Allianz, Commerzbank, Deutsche Bank and Deutsche Postbank – the most blue chip of German banking pride – in a move which will surely see foreign investors sell their holdings it has already driven the euro to a four-year low overnight. The euro project is built to fail without a unified fiscal and tax regime, sooner or late, as eurosceptics have predicted from the outset, the euro will be torn apart.
Euro politicians are now blaming speculators – a sure sign that they want to shoot the messenger – speculators are the harbingers of economic reality, not the creators. The euro is at a four-year low for good economic reasons, not because traders are shorting it.
Britain is spared this financial contagion as it stands in splendid isolation from the European Central Bank. Let us hear no more from europhiles on the laughable “stability” that joining the euro will bring.