When the EURO was created the idea which prevailed was that it could consolidate E U countries which would then form the United States of Europe.
Everything happened so quickly that no rules were laid down on how the EURO would be controlled !!! Not even the recent Lisbon Treaty covered this omission. Idealists do not like too much detail anyway !!!
The fact that two small countries like Ireland and Portugal needed propping up did not ring any alarm bells. The loans required were small. Now there is Greece, a country which was probably already insolvant when it adopted the EURO but which was "rescued" with loans of 110 Billion euros and which a year later needs another loan of the same amount.
Suddenly politicians in Europe are trembling in their boots, not only about Greece, but because Italy and Spain are also in trouble !!! That means that 5 countries out of 17 which adopted the EURO are on the verge of bankruptcy !!!
The real problem is that no politician wants to admit that an insolvent country should be declared bankrupt and quit the EURO !!! Unpaid debts should be suffered by creditors just as in a normal winding-up !!! However this is the kind of decision that can be expected this coming week.
Other problems could also surface. Angela Merkel, the German Chancellor would not be against readopting the old German Mark !!! Other smaller countries too, have also regretted abandoning their old currencies !!!
If nothing else, we can only hope that the European Central Bank will make a serious effort to establish central financial controls, and create liquidation rules when a country gets into trouble !!!
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