Politicians have to much invested into this to do the right thing and end the EMU.
The current set of politicians sitting in the European parliament have, but that doesnt mean it cant or wont change.
These periphery economies are now wrecked and are heading for yet more wreckage.
Spain is uncompetitive, its workers are paid too much, have too much union leverage and dont produce much of anything that people want – apart from houses but they built enough of them to last ten years already.
As such, unemployment has doubled in 3 years and as it stands, it would take 4 years to bring unemployment down to the yet still high figure of 10% if (and thats a big IF) 45000 new jobs can be created each month.
What are the chances of that happening? Unemployment is still rising ! Where are these jobs coming from?
In 2011 the bulk of the 2009 unemployed will lose their benefits. So whilst there has been little social unrest so far, the generous benefits are now coming to an end for hundreds of thousands. Its a horrific prospect and my heart goes out to them.
Of course the Spanish governments deficit reductions rely upon these generous benefits ending after 2 years, the reduction in benefit costs are factored in to their delivering on their austerity plan – so these German banks can get their money back for a bunch of idiotic investments.
The Spanish have never struck me as not being canny when it comes to money, as soon as they twig their eating bread and water so the germans can keep eating sausage and beer, they’ll kick up.