The euro sticking plaster peels off

The sticking plaster is peeling off again. Spanish bond yields have again breached 7 per cent this morning. That 10 year gilts are back over this level is yet another reminder that the piece-meal solutions the Eurozone is trying just won’t work. Indeed, they are unravelling at an ever quicker rate as the markets realise that the supposed agreements reached at these summits rarely survive close inspection.

What is becoming quite clear is that the prosperous, fiscally-prudent countries of northern Europe — and that’s not just Germany but Holland and Finland also — simply aren’t prepared to give the Spanish and the Italians let alone the Greeks, the kind of help that is needed to actually stabilise the situation.

The break-up of the Euro would be extremely painful in the short term. There would be an alarming level of chaos in the markets. But it is the least worst, realistic option.