EU teetering on collapse

[croam]

catchy headline eh? What if the French or Dutch veto the EU constitution? It could spell economic disaster for the EU countries as it will make European investing alot less appealing. Tick tock, tick tock...time will tell.

[divttp]

"The EU could disintegrate toward a free-trade zone," said WestLB Financial Markets on Tuesday. "Such developments would spell disaster for EMU and the ECB."


"Yet these rumblings are more than scare tactics. The euro is only 6 years old, and its launch contradicted economic theory. Skeptics argued that currency union cannot work without political union because unified fiscal and macroeconomic policies are needed to complement a single monetary policy.

The fear is they may be proved right."


"Merely the threat of postponing EU political integration would encourage investors to move capital out of the euro zone and to sell the euro currency. Long-term risk premia on sovereign debt, especially for heavily-indebted euro zone countries, would rise, they said. "

money.cnn.com/2005/04/17/news/international/euro.reut/index.htm

[Ribaric]

This sounds more like an attempt to influence the forex markets than a real political insight. I predict that the EU constitution will bite the dust but I don't think it will make a scrap of difference. It will muddle on as it always does. If anything, the EU could benefit in a reduction of the value of the Euro, it's tough enough to sell anything as it is.

The EU will split, re-form, split again and so on, there is no chance of a steady state - and so what? They make rules which the two biggest economies can't keep to, so they change the rules. It's the Italian way.