The EU and the Eurozone

[AndyHB]

In view of the events happening in Greece and Italy, not forgetting the economic situations of Portugal, Ireland and Spain, what will the future hold for the Eurozone?  Will the EU revert to being, in effect, a trading project or will there be an even faster race towards political and financial unity?

I'd be interested to see our old friend MMike's take on the current situation.

[Jan]

There seems to be quite a lot of confusion & uncertainty right now - and here in the UK we don't really know for sure how it is going to affect us. Some wonder why we should be affected anyway since we don't have the euro.

[AndrewF]

It will affect us because over 60% of our exports are to countries in the euro-zone. When we joined the Common Market (we never agreed to joint the EEC) we were forced to more or less abandon our trading links with the Commonwealth countries because we had been giving them favourable terms which was against the C M rules... Just shows we would have been better off staying out altogether!
I suspect teh Euro is doomed unless there is some sort of federated European government. This experiment seems to me to be showing that with economies as diverse as Germany and Ireland you can not have a common currency unless the stronger areas are prepared to subsidise the weaker ones - and that at least implies a considerably greater degree of integration than they currently have in terms of government and shared taxations.
IMO either the Euro zone is about to get a lot smaller (which the treaty does not allow for so it will ahve to be completely re-written and a new treaty agreed - with all the instability implied in that while the new treaty is decided) or it is about to explode completely, or (possibly) Germany and France will pull their collective fingers out of their respective bums and put up a shed-load more cash (and it will be a HUGE amount if Italy is not to drag the rest of the Euro-zone down) and stabalise the situation for long enough for the treaty to be re-written to allow some countries which should never have been in the Euro to start with to exit without shattering the economies of the rest of the world.
Sadly i rather doubt they can manage this and I therefore think we are in for what the Chinese curse refers to as 'interesting times'.
I hope I am wrong!

[AndyHB]

... or (possibly) Germany and France will pull their collective fingers out of their respective bums and put up a shed-load more cash (and it will be a HUGE amount if Italy is not to drag the rest of the Euro-zone down) ...

Can we really rely on France to do anything - it is already beginning to slide Italy-ward!!

[AndrewF]

And Spain is now showing signs of replacing France as a safe country...??? - god alone knows what will happen!!