The Eurozone seems a bit like a balloon with too much air (ie fear about too much debt) in it. It balloons out at weak spots and when the potentially fatal weakness is patched over with liberal applications of money, as with Greece, why, it balloons out somewhere else. So now it is Spain‘s turn.
Mutti Merkel’s Pursestrings
According to Europhiles, the situation can only be resolved with the issue of Eurobonds, ie the ‘mutualisation’ of debts. Mutti Merkel though has made it clear that Germany would only consider such a move afterfiscal union. This would mean that the entire Eurozone would be brought under a centralised budget controlled in effect by itself. Something proud peoples like the Greeks (if not their political leaders) are unlikely to tolerate
A Wild Card thrown from the North
However, while all eyes have been on Greece, Spain and other south European countries with their possible exit from the Euro because they cannot tolerate the crushing burden of their debts as required under German-dictated 'austerity', here comes a wild card thrown from the opposite direction.
The focus is rightly always on Germany as a sternly disciplinarian lender of last resort, but it is too often forgotten that Germany is not the only hard–working, thrifty country which will be required to subsidise the wild spending of the Piigs.
Finnish Finance Minister Jutta Urpilainen stated that: ‘Finland is committed to being a member of the eurozone, and we think that the euro is useful for Finland. Finland will not hang itself to the euro at any cost and we are prepared for all scenarios.
Collective responsibility for other countries' debt, economics and risks; this is not what we should be prepared for. We are constructive and want to solve the crisis, but not on any terms".
Should prosperous Finland leave the Euro because it has no desire to shoulder the problems of the profligate southern states, one may rest assured that there will be a strong temptation for other such states to follow.
So if the measures necessary to save it are not out in place, the Eurozone in its present form at least is doomed.
And if the measures technically necessary to save it are put in place, it is doomed as well.