Sarkozy vs Merkel = ?

[308mate]

If this goes tits up and the Euro sts itself and consequently the state of Europe falls apart (for argument's sake), what in lay-terms are potential outcomes for the (very) average Brit?

[Crusoe]

Couple of options, some of the minor countries get their own money back and devalue it against the euro, the big lenders loose out some of their money but don't have to bail out the country and dissolve the euro completely. Germany might want their Marks back too and set a higher value compared to the euro though this would destroy the whole euro thing you would imagine.

The French way would be to bail everyone out and then have political and economic rule over everyone in the euro zone so that the budgets and spending are all managed centrally and cuts can be forced on countries and the repayments made allowing a power grab at who gets to manage the whole of Europe.

Mixture of the two might happen though I believe there is no way Greece can pay back their existing outlay so someone is either going to take a hit and help them out or they are going to have to pull out of the euro and devalue.

[308mate]

Crusoe said:

Couple of options, some of the minor countries get their own money back and devalue it against the euro, the big lenders loose out some of their money but don't have to bail out the country and dissolve the euro completely. Germany might want their Marks back too and set a higher value compared to the euro though this would destroy the whole euro thing you would imagine.

The French way would be to bail everyone out and then have political and economic rule over everyone in the euro zone so that the budgets and spending are all managed centrally and cuts can be forced on countries and the repayments made allowing a power grab at who gets to manage the whole of Europe.

Mixture of the two might happen though I believe there is no way Greece can pay back their existing outlay so someone is either going to take a hit and help them out or they are going to have to pull out of the euro and devalue.

Excellent precis.

But I was rather hoping to find out how it will affect my holiday to Spain or France, for instance.

[Crusoe]

Guess no change for a while, bound to take several months though I have advised my dad not to buy his retirement house in Italy for a year or two till this all settles out. Short term the euro will probably drop as there is too much speculation so your holiday spending money might go a bit further though expect there to be the same inflation over there. Expect a few running pitch battles with unions and police all over the place as everyone has to tighten their purse strings and unemployment increases.

Edited by Crusoe on Tuesday 15th June 12:55

[loafer123]

308mate said:

If this goes tits up and the Euro sts itself and consequently the state of Europe falls apart (for argument's sake), what in lay-terms are potential outcomes for the (very) average Brit?

A question of when IMO, but the death of the Euro does not necessarily lead to the death of the EU. Funding might become more of an issue, reducing the power/tentacles and making it more like a Free Trade Area.