Ireland, Greece, Portugal and now Italy can’t pay their bills. The solution thus far has been to bailout and impose massive austerity on their economies, which has led only to economic contraction and the looming shadow of another global recession.
Meanwhile, the threat of contagion puts the whole future of the Euro in jeopardy as we begin to worry how France and Spain too will afford mounting debts if their economies continue to shrink
And yet, the talk is all about political solutions and passing more austerity measures. But if the Euro has any chance of survival at all then the focus surely now needs to be on how to make the Eurozone more competitive again.
What do we want? GROWTH! When do we want it? NOW!
The massive elephant in the room that no one is discussing is, why not devalue the Euro?
Interest rates in the Eurozone still sit at 1.25% while in the UK they’re a mere 0.5%. Quantitative Easing has been widely employed in the UK and US economies with some benefit. So, a sudden slash in interest rates within the Eurozone to 0% combined with a massive injection of extra money might be the double shock required to bring this dead goose back to life.
Otherwise, we might as well all start building our bunkers now.