http://www.telegraph.co.uk/money/mai...04/ixcoms.html
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The euro-zone will face its toughest test in 2005 as the weak dollar bites deeper INTO phpbb_exports and investors take a less forgiving view of fiscal policy in the "Club Med" states.
With growing talk of currency "warfare" in EU capitals, the question for 2005 is how long the EU will continue to tolerate Washington's weak dollar policy. Investor angst over the creditworthiness of Italy, Greece, and Portugal may be the second shoe to drop.
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Tollerate a weak dollar? What choice does the EU have? As for all these Micky Mouse economies that make up the EU, it has to end in tears sooner or later. Houses of cards tend to get blown over sooner or later!
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But a clutch of top analysts have called for a rethink after the collapse of the Stability and Growth Pact, which swept away the fiscal rules underpinning EMU.
The job of policing fiscal discipline has now switched to the markets. EU officials fear that 2005 could see bond yields diverge sharply as investors charge a higher premium for risky debt, sending the Club Med states INTO phpbb_a downward spiral.
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Could we see the demise of the Euro at least start in 2005? That would cause us pain as the whole EU collapsed, but it is better that it happens now, rather then 10 years down the line. I just pray we manage to stay out of it before the inevitable does happen. When the undepinning goes, the house usualy follows not long after!
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The Commission's December report said: "Those seeking reassurance that the upturn in the euro area is now established will be disappointed."
Germany's DIHK trade group says the export sector has already reached "the zone of pain" but the worst effects are yet to come.
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This is getting scary! Already the signs of implosion are there, yet our main parties still want to jump in. We can't let Britain be thrown to the wolves like this!
Quote:
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Over-heating has left Spain, Holland and Ireland vulnerable to a house price bust, according to the IMF. French property is stretched.
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Thats what you get when you have no control over your interest rates. The disaster awaiting Ireland will make Britains housing slowdown seem like heaven. We could quite possibly see another mass immigration to Briatain, as Irelands economy collapses.
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On the bright side, the euro squeeze may at last compel Europe to confront its structural demons.
Traumatised by job loss to Asia, France is ditching its 35–hour working week, cutting the dole for those refusing to take jobs, and slashing through its thicket of labour rules
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I'm sure that will warm the Frenchies towards the EU. No wonder Chriac is trying to rush the constitution vote through!
04-01-2005, 03:20 AM
Formidable test for growth and stability
Linear Mode
