The Unraveling of the EU ?

The recent bail out of Greece by the IMF and EU members shows the weak link in the EU concept. The original concept of the EU market which allowed free trade was expanded to free flow of people and eventually a common currency. Until the dismembering of the old USSR, the concept was fine - but then EU started getting ambitious . They expanded and in addition to the Mediterranean countries also started opening the door to some of the former CIS states.

The problem is that you have a mix of economies. With Germany and France playing a dominant role they are being asked to carry the heavier burden of bailing out Greece. With their own economies just beginning to recover and unemployment still being an issue,the voters are reluctant to see the German ant supporting the Greek grasshopper. While this is the first time, it certainly wont be the last time. There is concern about the other PIIGS nations ( Portugal, Italy, Ireland, Greece and Spain) also requiring support. If this happens then you can be sure that the voters in Germany,France and the other stronger economies will throw up their hands.

Will this be end of the Euro ? Perhaps one is being overly concerned that the countries will be able to avoid default and the Euro will survive. However, the politicians have to give some thought as to how to deal with a possible default by two or three EU countries simultaneously. The possibility of this increases as EU encourages some of the smaller former CIS states to join in order to remove them from Russian's area of influence.


They will have to think hard before going ahead.