Greece providing a first serious test of will in the Euro bloc. Watch that space, for it will not be the last of this theme.
If you are still debating with yourself whether it would be good for the UK to join the euro bloc or not, look no further than Greece, Spain, or Ireland to see that it is a straightjacket that removes all options of local control. If you join the euro area, you are automatically tied at the hip to Germany's economy. Germans are desperately wary of creating inflation, and their still-operative export-based economy is still bringing in enough to just about pay the bills so they are not (yet!) forced to join the global money printing orgy to any significant degree. As you can see, Greece, Spain and Ireland are facing up to the fact that the costs of their socialist welfare-state economies are unsustainable.
France is stealthily going behind the curtain recently with their quiet loan to spend on more social largesse, trumpetted as more "investment for the future". Yeah, when was a debt ever an investment? If you believe that, perhaps you would like to lend me a million pounds over 30 years for 4% interest, so that I can "invest it in paying off my previous loans that are coming due, plus feeding and educating my kids"..? Maybe in a year or two you will then give me a new loan for two million, which I will use to repay the earlier loan you gave me, and to pay for feeding and educating another batch of children? This is called a Ponzi Scheme when Madoff does it, but when a government does it well that's just peachy.
In the past, all of these countries simply would print up more money (Quantitative Easing in today's parlance) to paper over the problem, by devaluing their local currencies. Like, for example, we are doing in the UK, and the American's are doing in the US. Now those hamstrung nations within the euro zone have this option removed from their menu. There is no other choice but some combination of cutting costs (people are starting to riot already, and they haven't even really begun to do what is necesary), raise taxes (good luck), or default on their debts and suffer the crippling consequences of that. Nice set of options there.
No, here we have the very reasons for staying OUT of the euro zone. I don't care what our leading politicians might tell you. They are all to a man simply looking after their own selfish interests.
In the UK we will continue to use our additional traditional option, printing more pounds to reduce the value of our debt to other nations. This is so much more acceptable to the average voting member of public, because it is more subtle and 99.9% of them don't even realise it is happening. The extent of our problems is such that we will do this in addition to also both raising taxes and significantly cutting public costs.
Labour will be voted out next year because people aren't feeling an economic glow any more. The Conservatives will be voted in, and they will take a razor to the welfare state and all public services, simply because it is unavoidable. Once again the cycle will turn, and we will have a new Thatcher to hate in Cameron. Few will realise they are punishing Cameron for Brown's mistakes, much as few realised they were congratulating Brown for the previous government's good stewardship and plans for the economy as handed over.
Democracy. What a farce.