Very interesting article by Ambrose Evans today.
The main points being:
EU is split. debtor nations in the south creditors in the north (mainly Germany)
Unless EU seeks full political union (which would entail internal subsidies like England gives to Scotland at present within th UK), then thr Euro will fail.
This has been my view for a long time. However the citizens of Europe are turning more against this idea. As Evans point out – anti EU parties are likely to get greater than 50% of the vote in Italy.
Defence. – EU relies on US UK but US is becoming far less supportive.
Russia – meddling all over the region. Internally in the EU countries and also the Baltics and Balkans.
My view is that the crunch point may come when the ECB tapers and stops buying bonds from the southern EU countires. This point is not far off. Then as Evans says there will be no buyers of these assets. At some point a country may be forced to issue debt in their own currency and break out of the Euro.
Also the ECB is sitting on enormous losses from these bonds it has been buying. Germany will either be forced to prop the ECB up or the enormous write downs could spell the collapse of the Euro.
Given the security implications it would be better if there was either a move to full political Union or a managed dismantling of the Euro. The latter would mean economic reflation and a new era of politicians could take the EU into the global era.