The euro’s death rattle

The end might be nigh for the euro. The currency has hit an all-time low against the Swiss franc, as individual eurozone government bond yields vaulted higher due to mounting concerns about the region’s debt crisis. To spell out what this means: in Spain, 12 billion euros of interest payments will accrue for every 100 point bond rise in Germany. That is more than Spain’s annual public investment in infrastructure (8.6 billion) and its entire defence budget (7.6 billion). At the same time, Greece is heading towards disorderly default or some form of devaluation. Or both. And now Italy looks vulnerable.

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Gavin Mortimer

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Well, I say that the end is nigh but, as the prime minister told the Spectator this week, Britons would be foolish to underestimate the eurozone’s determination to save the currency. But it will be the end of the euro as we know it: a monetary union with no fiscal union.