Spanish Property Insight › Forums › Spanish Property Forums › Spanish Real Estate Chatter › Demise of the Euro closer? – Ignore this if it bores you. › Re: Re: Demise of the Euro closer? – Ignore this if it bores you
IMO the Euro will go in it’s current form maybe a 2 tier Euro if it’s lucky.
However, should it survive eventually after constant patching up, does anyone here think we will ever see the likes of a 1.65 euro per £1 stg exchange rate ever again? 🙄
Yes – if Spain left the Euro, or was relegated to a 2nd division Euro.
In my opinion the Euro is too strong for Spain. If Spain went back to the Peseta tomorrow, it would devalue overnight by 25pc or more against the Pound (my guess). That’s why Spain has to get more competitive by raising productivity and / or reducing costs. Unless that happens, or unless the Germans agree to subsidise our standard of living for ever (fat chance), the only possible outcome is leaving the Euro. Will Spain take the bitter medicine we need to stay with the Euro in the long-run? That’s the big question.
Barcelona is now as expensive as London, but salaries are nothing close. Purchasing power is going down, and many Spaniards are getting poorer.
Mind you, if we crashed out of the Euro, we’d all be 25pc (or however much it is) poorer overnight.
For what it’s worth, I dearly hope Spain takes the medicine and stays with the Euro. But I wouldn’t bet on it.