Although I am not a big friend of Euro and EU I do not believe that Euro will collapse. More likely is firing of Greek from Euro Zone and more strong Germany which will became an European Super Power and probably degrade the Function of EU, UK and ECB. Reasons: Except some week states from South Europa there are not economical reasons for downgrading of Euro.I guess that some "big players" make trillions of money with speculations about Euro fail. Dangers: Some dumb lefts in powerful Germany will demand more distance between the U.S. and Germany.
Keeping it simple . The reason that it will collapse /need to change fundamentally is that the economic powerhouses of France and Germany could now be brought down by the failing of Banks both here in Europe and the US , stemming primarily from Italian and then Spanish weaknesses . Greece per se is a small problem in isolation , and the danger it poses has largely been contained . The same comment applies to Ireland , Cyprus , Portugal and even Belgium and Hungary (IMF bail out I believe) . However , from Italy onwards , the involved sums get huge and when Spain admits its full troubles shortly , the amount required to ring fence all those smaller countries plus Italy , Spain and then France could be around $10 trillion . The ECB cannot bank role that (and Germany presently will not agree to the ECB issuing Bonds ) and the IMF is a non starter . As you have seen today , PR schemes are afoot to tell you that funds are available to re-capitalise failing banks . That is all hogwash . Ultimately only the Federal Reserve can raise that sort of imaginary money , and if it tried , the effects would be mayhem --- rapid hyper inflation and commodity prices off the scale . Which leads to further unemployment and a downward spiral. The story is a simple one . Imagine you are bankrupt and six of your friends are owed money by you which they cannot afford to lose because they will in turn be bankrupt . But they in turn each have twelve friends in exactly the same position -- they will be owed money that they can't get , which bankrupts them . And so on And on . But , of course , it isn't you and your friends . Rather , it is the global network of Banks . And that is one hundredth of the actual complexity of the real world situation .
You are partially right, but Germany is strong enough to push Europa play its game, I think after small troubles everything will be fine and Euro get saved.
Also I do not believe that Euro will collapse, unfortunately, there are overmuch interests around euro: bank, states, corporation, bureaucrats ecc...
Your reasoning is ignoring the huge factors which many don't realize. Europe is not an economic power house. The only one which can be one on it's own is Germany. Population growth is not on their side either. They have an aging populace much like the US. Younger population means better tax revenue for governments. Banks in Europe are not a few billion Euros in the hole but many trillions, just to survive over the next 2 years banks will need about $10 trillion. Just to survive into 4Q next year they will need $5 trillion. Currently it's the Fed, BoJ, BoE and other central banks giving a very sweet deal (currency swaps) to the ECB and European Banks at the expense of US, Japanese, British and so on. At some point those swaps will end. Then Europe will have to pay those back. To pay those back since the ECB has a single mandate they will have to raise interest rates (due to inflation) and that will slow down their economies once again and they'll be in the same mess again. But you should also know that those who are going to make "trillions" on the fail of Europe will be more then anybody 2 or 3 EU banks and 2 or 3 US banks. Banks that if you live in the US want to happen because if Europe doesn't fail, you will have to bailout as they won't be able to pay counter party trades. Nobody in Germany is suggesting a rift between the US. What they are suggesting is letting parts of Europe go. That they would be better off alone which is true. So don't read alot into speculation of what Germany may or may not due with it's relationship with the US. Too many economical ties for them to push the US away as the US is it's 2nd best customer after France. T-Mobile, Bayer, Adidas, Puma, Porsche, BMW, Aldi and Daimler AG aren't going anywhere soon.
You are so impetuous . Just wait until the French and Spanish Banks are seen in all their nakedness . Then we will go looking for the power lady . She will be sitting alone on the toilet making noises that you have never heard before .
