The euro

Reading about the state of the euro is becoming painful. Vast amounts of column inches are being devoted every day to ever more ingenious ways of saving the wretched experiment. Some of the leading commentators might soon qualify for fiction awards such are their increasingly imaginative flights of fancy.

This week, Marc Carney, Governor of the Bank of England chose Dublin to pronounce on how to solve the problems of the eurozone. His idea of a transfer union is fanciful. So, why did Carney say it? What is this urge on the part of commentators and high public officials to run away from the inevitable?

Philip Stephens said in the FT on 30th January that the euro has a future only if weak governments get the economics right. If they get the economics right they will abandon the experiment! What was Stephens thinking? Perhaps about Chancellor Merkel's well grounded fears, which he also referred to in the article, that the failure of the euro would put in doubt the entire postwar European order. It would not put the postwar order in doubt, it would demolish it and more or less instantly. Since Syriza won the election in Greece, we have been reading about the increasing confidence of the great and the good that the Greeks could be jettisoned from the eurozone without bringing it down. Don't believe that for a moment. The euro is a political project into which as much political as actual capital has been invested. Grexit will be followed by the exit of the rest of Club Med within twenty four hours and the euro will be history within seven days. The EU will follow the euro into history within a year. Such is the magnitude of the blunder, that no institution associated with the euro experiment will survive its demise. (That could include the IMF.)

Ireland could leave the eurozone without bringing it down. Our decision to join it was so utterly foolish that our decision to leave it would be welcomed by the beloved markets and would, without doubt, strengthen the currency (it would not save it though). Not to mention how we would benefit! Cyprus could, in theory, leave but in practice they could not because their exit would trigger a general Club Med exit. The Baltics could leave without anyone noticing except Putin and you wouldn't want that guy to be taking too much of an interest in your affairs. Ireland is probably the only eurozone state that could bail-out without immediately bringing the whole house of cards down. A good position to be in for the coming years if the inevitable doesn't happen before we come to our senses.

Peter Popham says in today's Irish Independent (It's time to think the unthinkable on Greek exit) - some people are up with the play - that everyone knows what needs to be done but doesn't want to suffer the consequences of being the first to do it. (Which is why Grexit will be followed by the rest of Club Med within twenty four hours.) The EU, as an institution, is riven with fear, particularly on the part of the smaller Member States. The larger Member States behave at a meeting in Brussels as they would have at the Congress of Berlin in 1878 or the Congress of Vienna in 1815. Except where the euro is concerned where fear and paralysis seem to affect everyone.

Of course the day and hour the euro folds the commentariat, national and international, will be in print and on the air saying that it was all inevitable and that they had said so many times. If the most influential commentators would actually say so now they could help end the agony and allow the economies of the eurozone to recover.