Is the euro dead?


Just when it seemed clear that the Eurozone could not achieve a more dismal leadership, things have taken a marked turn for the worse.

Until recently we had become increasingly used to the fact that Eurozone emergency summits ran to a fairly fixed pattern. An escalating solvency crisis involved lots of debt, prompting a large meeting - usually over a sumptuous banquet - with somebody then receiving a truckload of cash before a concluding chorus of the righteous leaders applauded the permanent resolution of the crisis while imparting a hearty positive message to one and all. (Often little codas and cadenzas would mention that some terms were unique and the refrain “Never Again!” would be repeated ad nauseam only for the unique exception to form an integral part of the next bailout).

In other words, it resembles a grand opera plot, albeit with a cast who are apparently bound to sing off key. Alas, this week’s amateur performance in Paris was not even worthy of Gilbert & Sullivan. In fact, we dropped all the way to a poor provincial pantomime act. From AAA sovereign, the Eurozone is being ‘hectored’ by a dismal provincial pantomime duo.

While Dominique Strauss-Kahn might pass as a variation on the Don Giovanni theme, Stan Laurel and Oliver Hardy would have managed a more polished and fiscally coherent performance than the miserable Merkozys - a failed magic act now in the sub-prime world of the provincial cabaret, mostly aimed at working class clubs and pubs, it seems. The core of their act is a few desperate attempts to perform incoherent conjuring tricks which bear the hallmarks of desperation that their own magical aura of credibility has simply fizzled out.

The farce involved throwing ill-judged and misconceived ideas at the audience while blaming everybody except those who have transgressed the rules of the Eurozone and thus undermined investor confidence. With no new material to offer, politically correct recycling took over and the Miserable Merkozys simply added hot air to the atmosphere by promoting a regressive Tobin tax on financial transactions which is little more than a juvenile attempt to break London as a financial centre and will ultimately only lead any Tobin taxing nations to financial backwater status. Belying her education as a nuclear physicist, Mrs. Merkel is clearly incapable of understanding even the vaguest vestiges of finance. At least psycho-Sarko prances around and tries to act as if he is charge of selling programs or seating people in the orchestra stalls, or something. The dowdy dowager of Deutschland just blames the markets. If only throwing toys out of your pram was an Olympic sport, then she and the poison dwarf of the Elysee might have something more suited to concentrating their, ahem, ‘talents’ on in the run-up to London 2012.

Without new thinking, the Euro is dead.

In the wake of this dismal, desperate performance of amateur dramatics, the obituary of the Euro ought to emphasize the complete leadership vacuum which consistently failed to stem the crisis. It does not need to end that way but the conjurors and clowns of the EU are tragically giving the common currency little chance with their amateur antics.

Patrick L Young

Patrick L Young, author of the bestselling "Capital Market Revolution!" books is an accomplished trader who has advised many leading exchanges world-wide. Nowadays he concentrates on advising investors in exchanges and financial market infrastructure. He is also actively involved in emerging markets, particularly Eastern Europe.
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