During 2009 a member of the Eurozone will seek to leave. I'm going to hedge my bets on which member and on whether they'll manage to pull it off during the year but I predict that one of them will start the process to quit.
I was wrong on that, since no country did publicly announce that they wanted to quit, but I suspect I was just a tad hasty. Greece seems to have been lying with statistics in a way that makes the distortions of climate scientists look like best practice. It is now reported that Greece has overshot its Euro-mandated debt commitments in a big way and that this is coming as a surprise because the Greek politicians insisted that the statistical authorities flat out lie about the state of the economy and government debt.
Now here's a question for the readers of this blog. How many other Eurozone nations might also be fiddling the books? Personally I'm extremely unconvinced about the statistics coming out of Greece's trans-Adriatic neighbor and it wouldn't surprise me if both Spain and Portugal are making economies in their statistical "actualité". I rather doubt Ireland is cooking the books but on the other hand it wouldn't come as a shock (to me) if it turned out that the Belgians turned out to have a bit of a hole in their numbers too.
Which leads to the interesting question of whether it would be the strong nations or the weak ones that would seek to bail out of the Euro. If you are (say) the Netherlands and have a (relatively) healthy economy and survivable levels of government debt you might not want to be forced to pay the same rates for your government borrowing etc. as those irresponsible southern Europeans - and even more you might not want to have to end up subsidizing their lax spending habits by guaranteeing their bonds or something similar.
I was wrong that the Euro would start to break up in 2009 but I'm not even slightly convinced that my overall analysis was incorrect. The Euro, as it is currently composed, looks like a disaster waiting for some hedge fund to short.
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