EURO-BOLLOCKS

As expected, the Euro-Zone countries have conjured up an agreement to ensure that the Greek economy does not collapse, at least this week.

When the idea of the Euro was first floated, I thought it was ridiculous; when it actually came into existence, I was with those who saw it as simply a political manoeuvre in the drive to create a single European state and one that simply could not work. Today, I am with those who still see it as such, but also now see it as a total failure, a disaster that the governments so intimately involved cannot afford to recognize.

Today, European governments are congratulating themselves on their success in resolving the recent crisis. They are merrily burying their heads in the sand and ignoring the future consequences of the current mess; yes, they have staved off immediate catastrophe but the real achievement is to push back the day of reckoning for a few months or, perhaps, a year or two.

Greece still cannot pay its debts, any more than can Ireland; Prtugal, Spain and Italy are all in trouble as well, all in part due to their involvement in the Euro-zone. At some point, the chickens will come home to roost and, given that Germany cannot afford to carry the burden of all of these economies for ever, the rest of the Euro-zone will eventually start to feel the effects. Worse than this, those EU countries not using the Euro will also bear substantial costs, and that includes the UK.

The clear result will be that we will all become significantly poorer. Stock markets will rise, but inflation will negate any profits; indeed, inflation will negate any financial gains made by ordinary private individuals in usually accessible, and safe, investments. In due course, the costs of failure have to be borne; the Euro is a nonsense dreamt up by politicians pursuing their own, largely hidden, agendas, and it is doomed to failure. The trouble is that the costs will be borne not by the responsible politicians but by the poor people who never understood what they were being dragged into in the first place. The European Union was created as a mechanism designed to prevent another European war but, in reality, it is much more likely to cause one than not. In the aftermath of the Second World War, the idea of a united Europe may well have made sense; in 2010 it still makes sense that European countries work closely together in a variety of ways, but trying to tie highly disparate economies together in a fiscal and monetary strait-jacket is a policy for total mayhem, which is what we have.

The Greek economy has, effectively, failed; Ireland is in the same boat and Portugal is not far behind. Spain and Italy are tottering on the brink and Germany is currently bearing most of the pressure. Eventually, the German people will cry 'Enough !', and then watch out.