Realistically, how screwed is the euro?

NewKidOnTheBlock_2

I have some money invested in European emerging markets and honestly, I wasn't that worried as it's grow 2% in just 1 month but I watched a video explaining the how Greece crisis thing and how it could "destroy all of Europe" lol. Now I'm not sure if that was an over exaggeration but what's the future going to look for EU stocks if Greece stay or pull?

bigfreddiel

When grexit happens the Euro is a dead currency!

Next to go will be spexit a itexit and maybe irexit - Spain, Italy and Ireland.

When that happens the euro will be a junk currency, no bank will loan to euro based country, productivity will end and inflation will spiral out of control making the Zimbabwe currency look good!

Just my tilt at the situation.

fj

Archi_Bald

It's not going to be pretty, with or without Greece. But the Euro and the EU won't die if Greece go back to the Drachma, and the other countries won't jump off the cliff like Greece might do if they vote No.

It's not as if the other Euro countries hadn't considered all eventualities a thousand times, and they aren't just postering when they say they don't want to see Greece leave but if they can't be convinced to stay they need to go. They can't have their cake and eat it, like Tsipras wants.

Pincher

If Greece had not been allowed to join the club, and remained a bunch of financial savages howling at the moon outside the Great Wall of Europe, then it makes no difference how they rot.


Now that they are in, it is seen as a symbol of how unworkable the whole European project is, and the doubt is what will happen to Portugal, Italy and Spain if they fail? Will they be bailed out or not?


It's like the Great Gatsby, who pays for everything, and all these !!!!!!!!!!s rush in to drink his champagne. When he stops paying for the party, the party ends.


Not sure what good Albania is for. At least they are not using the Euro.

HSVX

If the Greeks leave the Euro then it sets a precedent. If any other country gets into trouble they will just leave the Euro to reap the benefits of a weak currency. This huge social experiment has been a total disaster.

kidmugsy

The euro was an utterly lousy invention. Its decay will take longer than people expect, and then it will suddenly accelerate. God knows how much damage the hubristic sods will have caused.

We should be glad that Major negotiated an opt out for us, and that Brown ensured that we continued to use it. If Blair had had his way, we'd be in the soup.

Glen_Clark

Overall the Euro has probably created a lot of wealth just look at the growth of Spain and even Greece since Euro entry vs. the UK despite these countries being much poorer, yes there is a hangover now but the party was good and had UK been in the Euro its retirees in France and Spain would have been much richer today.

Reaper

I am not sure what video you refer to but remember Greece is insignificant, accounting for 1-2% of Europe's GDP.

While there is a fear of unexpected knock on consequences it has been obvious for so long I doubt anybody is unprepared.

I believe leaving the Euro will benefit the Greek economy in the long term, but make no mistake it will impoverish ordinary Greeks immediately. Anybody who has not been sensible and got their Euros out of the bank will find them converted to Drachma which will immediately plummet in value.

When they see what has happened to savers in Greece I can't imagine it becoming a popular option elsewhere.

So in the end I think a Greek exit would prove to be pretty irrelevant.

Archi_Bald

Reaper wrote: »

When they see what has happened to savers in Greece I can't imagine it becoming a popular option elsewhere.

It wouldn't only unpopular with savers - - the impact on Business would be equally devastating over the next few years. Can you imagine that anyone would want to make any investments in a country where you might get nationalised out of the blue, and where loan agreements mean nothing? Greece needs massive business investment, they can't survive by becoming a cheap tourist destination.

Remember, not even Tsipras wants to leave the Euro. He just wants to stay in the Euro, pay no debts back and continue to get funded by the IMF and the ECB.

Good article from a guy who was last the Chief Economist at UBS: http://www.prospectmagazine.co.uk/world/greek-referendum-a-no-would-bring-new-economic-darkness

zolablue25

I think if/when the Grexit happens then Greece will endure a lot of pain for quite some time. Ultimately it may prove to be a good thing but the interim will not be pretty. IF this turns out to be true then I don't see Spain/Portugal/Italy dashing for the exit. If the pain is swift and the recovery strong then there may be more calls for these countries to leave and I could imagine, in those circumstances, the Euro ultimately becoming a very strong currency of Northern Europe backed by Germany, NL and France with, probably, Finland and Belgium.

The financial history of Greece does not make pretty reading and, really, they should never have been allowed to join the Euro - but that's all history now.

atush

All I know is, I am off to France on Sunday and the rate of the euro today means more 3 course lunches with wine. And my property tax is cheaper.

Conversely, It means should I sell my house in france it will be worth less in sterling terms.