The growing economic crisis in Europe might have reached the point where the Euro, the common currency of 17 nations, is in jeopardy. The Guardian reports:
Fears that Europe's sovereign debt crisis was spiralling out of control have intensified as political chaos in Athens and Rome, and looming recession, created panic on world markets.
Reports emerging from Brussels said that Germany and France had begun preliminary talks on a break-up of the eurozone, amid fears that Italy would be too big to rescue.
Despite Silvio Berlusconi's announcement that he would step down as prime minister once austerity measures were pushed through parliament, a collapse of investor confidence in the eurozone's third-biggest economy sent interest rates in Italy to the levels that triggered bailouts in Portugal, Greece and Ireland.
Italian bond yields surged through the critical 7% mark, at one point hitting 7.5%, amid concern that the deteriorating situation had moved the crisis into a dangerous new phase.
In Athens talks to appoint a prime minister to succeed George Papandreou were in deadlock, and will resume on Thursday morning. The Italian president, Giorgio Napolitano, sought to reassure the markets by promising that Berlusconi would be leaving office soon.
Angela Merkel, the German chancellor, said the situation had become "unpleasant", and called for eurozone members to accelerate plans for closer political integration. "It is time for a breakthrough to a new Europe," she said. "Because the world is changing so much, we must be prepared to answer the challenges. That will mean more Europe, not less Europe."
The president of the European commission, José Manuel Barroso, issued a new call for the EU to "unite or face irrelevance" in the face of the mounting economic crisis in Italy. "We are witnessing fundamental changes to the economic and geopolitical order that have convinced me that Europe needs to advance now together or risk fragmentation. Europe must either transform itself or it will decline. We are in a defining moment where we either unite or face irrelevance," he said.
Senior policymakers in Paris, Berlin and Brussels are reported to have discussed the possibility of one or more countries leaving the eurozone, while the remaining core pushes on toward deeper economic integration, including on tax and fiscal policy. "France and Germany have had intense consultations on this issue over the last months, at all levels," a senior EU official in Brussels told Reuters, speaking on condition of anonymity because of the sensitivity of the discussions.
Financial regulators across Europe were last night carefully monitoring the health of their heavily exposed banks, amid concern that the turmoil could lead to a debt default, or even the break-up of the euro.
There's more at the link. Bold print is my emphasis.
Notice how the politicians and Eurocrats are glibly talking about 'closer political integration' without so much as mentioning consulting the citizens of the nations concerned. They don't want to know what the people of Europe think about their plans; they simply want to advance their integrationist agenda at any cost. It reminds me of Rahm Emanuel's (in)famous words:
You never let a serious crisis go to waste. And what I mean by that it's an opportunity to do things you think you could not do before.
Keep your eyes peeled on Europe for the next few days. If they don't find a solution, fast, there's a real possibility of economic meltdown in at least five or six nations. It may take an immediate infusion of as much as a trillion Euros to prevent that; and if the Eurozone prints that much money, it can only lead to rampant inflation, plus demands from other countries for the same sort of bailout that Greece, Italy, Portugal, Spain and Ireland will receive. If that happens, the effects are bound to be felt across the Atlantic, sure as the sun rises in the morning. It can't be otherwise.