Is the Euro well and truly buggered?

...... Talk about fantasy. That’s like asking Wellington to stress test his army against a scenario where Napoleon has a B-52 at Waterloo. You don’t re-position the troops—you retreat as quickly as possible across the channel, if not across the Atlantic.

Of course, we get it, contingency planning is prudent. But just what contingency are we planning for? In break-up new currencies will be introduced. But will they trade freely? Probably not. As we noted in our original piece on the costs of break-up, it is highly probable that capital controls would accompany exit. Spot, forward, futures, swaps, options and other currency derivative contracts might not even materialize, or perhaps only for limited current account transactions. Companies preparing plans on how they might manage multi-currency cash flows in a post-Eurozone world might be advised instead to pay attention to the risk of not getting paid at all, never mind in which currency. Counterparty risk—bank-to-bank and company-to-company—would soar as defaults mount.

If one were to view this with a cynical eye, one might imagine that this was the end game all along. It has turned out to be much more dramatic and serious than Delors and his German counterpart at the time could have imagined, but as long as the end result is the same in the long run (10 years from now when everyone has recovered and is having their budgets set by technocrats in Brussels) ......Job Done!

If the euro is preserved and Europe moves toward a more unified future, Mrs. Merkel will probably win the lion’s share of the credit, perhaps one day being hailed as Europe’s savior. But if her prescriptions turn out to be inadequate, she could reap the blame for presiding over the collapse of the euro, with untold consequences for the world economy.

As far as the grand idea of the U.S.E is concerned, we Brits have been revolting since day one, as any French citizen will tell you.

The present new Government now has to do the nasty mucking out of the stables, but try to balance austerity (we're slowly drowning, just paying the massive interest on the diabolical debt that Labour ran up) with not doing so much cutting as to plunge the country in to recession.

.......the course proposed by the Russian Minister was contrary to the independence of the Greek nation, because it would enable Russia to keep up a general sort of control over the conduct of the Government and over the finances of the country hereafter..
......... The Duke of Wellington said, it appeared to him that it was not necessary to take the occasion of the introduction of this Bill to enter into a general discussion with reference to the foreign policy of this country. A good deal could certainly be said on the subject; but he did not think that it would tend to any useful object to introduce such a discussion at present, nor was it desirable, for various reasons, to be drawn into a discussion of so wide a nature under existing circumstances.
..........Viscount Melbourne perfectly concurred in the sentiment of the noble Duke, that it would have been better if the three states could have been brought to act together...........He trusted, however, that the course which had been pursued, involved no risk of this country separating her policy from that of France and Russia in respect of Greece. .

We are directionally moving toward the abyss," says Euro expert, native Italian, and founder of the Zebra Fund Fil Zucchi.
As has long been apparent, the crux of the issues are the differing principles and needs of the nations involved. Zucchi says the best solutions require printing money and risking inflation; prospects instinctively horrifying to the member nation with the most sway in the Eurozone: Germany.
Until "the Germans and to a certain degree the French decide to accept inflation, there's no way out," Zucchi tells me, putting a damper on the otherwise upbeat Festivus charity event.
Zucchi notes that Germany's history with inflation doesn't bode well for a comprehensive solution to Europe's woes anytime soon. The country's "DNA is to prevent inflation (and not) repeat the Weimar scenario just like our DNA is prevent deflation and another depression."
Given this inherent fear of inflation and the political impracticality of forcing French or German citizens to bailout the weaker members of the Eurozone, hoping for the best seems unrealistic. That said, Zucchi is guardedly optimistic about Europe's ability to avoid the worst.
"I am somewhat hopeful we are not going to see a violent uprising," he offers. So there's that.
"If the ECB went all-in there would be an extension of the amount of time to deal with the debt crisis," concludes Zucchi with relative optimism.

As has long been apparent, the crux of the issues are the differing principles and needs of the nations involved.

We've known this since the Euro's inception. So what took them so long to realize this simple concept?