June 6, 2005
The Fall of Europe, er the Fall of the Euro
A leading Blairite cabinet minister made the admission last night as the European Union descended into deeper turmoil, with doubts surfacing over the future of the single currency.Mr Blair, who will seek to shift the focus of his administration on to poverty in the Third World this week during talks with President Bush, has told his closest allies: "Africa is worth fighting for. Europe, in its present form, is not."
About a week or two ago I spoke with a friend who said the Euro probably would not be dissolved, but it is looking bleaker by the day.
For the last few years the Euro has had a strong run on the Dollar, but that combined with a variety of economies all trying to fall under the Euro umbrella has caused slowed economic growth and rising unemployment in the most established countries using the Euro (such as France and Germany).
another quote from the article
Last night, John Redwood, the leading eurosceptic Tory MP, said: "You can't have a single currency without a single government. They are in a mess because they have only done half of it and they are now discovering in a painful way what that means."
With the US fed raising interest rates to stop escalating real estate prices oil has sagged and the Dollar has surged. The bleak future of the Euro has caused the Dollar to gain about 10% on it in the last 3 months.
I do not pay as much attention to economics as many do, but for an extended period of time there were talks that the Euro would replace the Dollar as the stable currency which commodities such as oil would trade in, but I can't see that happening anytime soon.
It is almost as if we pushed our own economic hardships outward by letting our currency free fall because we knew that it would share the hurt and likely undermine the stability of competing political systems. Had our Dollar not fallen so far the unemployment rates in some of the more developed European countries may not have got as high as they are.
Posted at June 6, 2005 6:33 AM