When someone with no background or experience in Europe pontificates about the Euro Crisis one wonders what the point of Business Television is. Maybe Mort Zuckerman plays golf with Michael Bloomberg but otherwise we are at a loss what his special insight about the Crisis should be. Maybe the 0.001 % really know something that could help solve the World's problems - or maybe they are just part of the problem?
We want to keep this post short and to the point: those members of the Commentariat who think that Fiscal Union will solve the current Euro Crisis will be in for a rude awakening - in a few years time, but maybe much earlier. A chain is only as strong as its weakest link, and there are quite a few weak links in the Euro-Chain. Even mighty Germany (as those on One Euro jobs there know already) is not as strong as it might appear. Its performance is strong only because the other countries are weak, bit like the conundrum in the currency markets where a strong currency means that the other side of the trade is by definition weak). Debts in Germany are also sky-high, especially if you include all private and bank debt and - most importantly - unfunded pension promises etc. How the poor German taxpayer, squeezed that he is by a relatively efficient (and merciless) tax collecting system, is supposed to carry the burden of all the freeloaders in the Euro Gravy train remains to be seen. I would not put my money on it except in very short term trades.
Anyone who can endure a certain amount of (intellectual) pain would do well to have a close look at the French President's speech to party loyalists held in Toulon on December 1st. While the French are often said to be particularly rational followers of the 'Cartesian' tradition we were aghast at the incoherent reasoning cobbled together in this effort to explain and possibly solve the current crisis in the EU. If the analysis is wrong the solutions cannot be the right ones and while a temporary patching up of the Euro structure might well work it gives little cause for longer-term optimism.