Greece On Edge! Scotland And Europe?

Ah, the European dream of a rival reserve currency to the $. It may just be about to be kaput.

So goes the argument by Ambrose Evans-Pritchard of The Telegraph:

ECB prepares legal ground for euro rupture as Greek crisis escalates

And the sub-header is worth a peeky too:

Fears of a euro break-up have reached the point where the European Central Bank feels compelled to issue a legal analysis of what would happen if a country tried to leave monetary union.

Spain is looking on nervously. The banks' capital ratios are being covered up and house prices have not been allowed to reset. Youth unemployment is around 40% and the general unemployment 'official' rate is almost 20%. Spain is now in so much debt it is basically playing a game of German Roulette. If the Germans don't bail-out Spain then Spain will leave the Euro. With Spain gone the Euro is finished!

If a handful of super powerful banksters wanted to wreak havoc they couldn't have done a better job. With the US teetering on the brink of popular uprising against Banksters and Britain not far behind Europe South and East is suffering and it's clear that Germany alone can't pick up the tab. If the US/Ukanian axis is to go down then the Euro will go down too. Can't leave a powerful and genuinely democratic super-power kicking around post US..

Back to Spain: President Zapatero enjoys dishing out money like confetti. Fortunately for Spain he can't just print more money like Gordon Brown and Mervyn King. The Germans wisely confiscated their money printer. That doesn't stop Zapatero from borrowing against bonds.. Indeed, he's borrowed so much that there is now a huge internal exchange rate between Germany and Spain. Off the top of my head €1 in Germany is now worth €1.15 and in Spain €0.90. Sounds like divergence to me..

Will the Euro survive? What's the European Central Bank saying? In a document entitled

Withdrawal and expulsion from the EU and EMU

the following points are made:

Recent developments have, perhaps, increased the risk of secession (however modestly), as well as the urgency of addressing it as a possible scenario,

The document goes on to explain that countries who leave the Euro must leave the European Union.

That warning is coupled with the chief of the ECB warning:

No state can expect any special treatment,

We can see that there really is a game of hard-ball going on. In banking you have 'moral hazard' meaning that if a bank gambles recklessly and loses it can turn to the taxpayer for a bail-out so it ain't going to stop! This is the sovereign equivalent of 'moral hazard'. The City is betting on a bail-out. However German taxpayers can't bail-out Spain, Italy, Portugal and others indefinately. And when they do, who's going to keep the Zapateros from going on another spending spree come election time?

Pritchard's verdict on Greece?

Even if Greece can cut wages without setting off mass protest, it lacks the open economy and export sector that may yet save Ireland in similar circumstances. Greece is caught in a textbook deflation trap.

If you think Europe has problems just wait till deficit spending catches up with Britain. There is a money-printing machine and it's still going ten-to-the-dozen in support of The City. After the election you're living standards are going to take a good kicking the like of which you've never seen before..

If Scotland gets out and uses the oil money to rescue its economy we could normalise the economy much like Norway has. The problem is that our 'tea and biscuit nationalist community' believe that now is not the time to talk independence. How utterly wrong can you be?

So fellow Scots my advice would be demand independence and ifyour countrymen lack the bottle -

Go East young man!