Wednesday, January 16, 2008

The rain in Spain falls mainly on the Euro...

There's an interesting prediction from City Slicker.
My vote was for Spain to exit the euro area, you read it here first. Wait to you see their sub-prime write downs on Spanish banks, whom the government bet the house on in tax and investment terms...

Now, that would be interesting, wouldn't you say?

Spain has, indeed, been hit rather hard recently. A few years ago, they were bowling along very nicely, but now unemployment and inflation are up and the economy is staggering slightly.

But the £1,750,000,000,000* question is, of course, should it come to such a drastic measure, will Spain actually be allowed to opt out of the Euro?

Interesting times...

UPDATE: via David Farrer, I come across this rather ominous article.
Thanks to England Expects for this link:
There is absolutely no solid evidence to suggest it but this publication predicts that by the end of the month of January Britain will have announced that it intends to join the euro.

I think they may be right.

Let us hope not: it would be a colossal fucking disaster. It would not, however, surprise me: after all, it was Gordon Brown who—quietly, quietly—switched us, from the traditional RPI and RPI-X inflation indices, to the EU's CPI inflation index.

But NuLabour would have to give us a referendum on this issue... surely?

* This is the rough figure that Wat Tyler puts on our total National Debt.


Roger Thornhill said...

If Spain is at risk of wanting out, the mask will slip from the face of the EU. Once that circus begins, all will know that the EU is arranged as a turnstyle - easy in but forget getting out. Once that circus begins, ther is no way people will agree to joining the Euro.

I suspect Gordon wants to join as it will cloud the domestic economic disaster that is coming.

Dundonald said...

Funny you should say that. Rumours abound on the notion that he is about to do just that.

No doubt that it will be a completely different Euro to the one used on the continent, and thus, no need for a referendum.

Anonymous said...

The American Civil War started when states chose to opt out of the Union. They too had a common currency.

Anonymous said...

Europhiles have been pushing the euro again recently, which I thought odd until seeing this news.

My recollection is that the EU Constitution, in the pre-amble, stated that the euro was the currency of the EU.

If this is correct, and if the Lisbon Treaty follows the Constitution, we may be forced to scrap the pound and adopt the euro.

And no, there would be no vote because we will have already swallowed the Lisbon Treaty.

Very depressing.

Roger Thornhill said...

I'd be very tempted to withdraw every penny I have and either keep it in CHF or USD. Hong Kong does multicurrncy accounts with very cheap spreads (around 0.3% last time I looked - an order of magnitude smaller than the UK).

Does anyone have the law on trading only in foreign currency?

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