The core structural problem of the EU and the Eurozone and the two speeds that exist between countries of the periphery and the center is creating an increasing asymetry of interests that can no longer be served by a single pan-European policy agenda. The Euro was founded on the ability of Eurozone countries to keep their economies in sync. The events of the last few months have revealed this to be flawed. One size fits all doesn't work for the weaker nations.

The periphery is in desperate need of massive deflation in order to avoid bankruptcy, whereas the center needs money rigidity to maintain inflation near zero and to keep control of its fiscals, so as to sustain economic growth and maintain its high competiveness.

These two extremes of economic policy cannot be served simultaneously by a central agency and in particular, the single currency as it currently functions leads to the doom of the periphery, while on the other hand a change in substance will offset the centre with countless ramifications on all field of community policy.

The creation of two-tiers of countries is most dangerous. Two tiers cannot survive the same sort of policies. The EU needs fundamental revisions otherwise it will collapse.

The global economy cannot afford to have a disorderly breakdown of the Euro. Credit would dry up which would have catastrophic effect on the banking sector. Banks around the world would have to come together to ensure there is sufficient available.

For the time being, take a look at the Swiss Franc as a safe-haven currency.



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