Wolfgang Munchau
Wolfgang Munchau is associate editor of the Financial Times

For many weeks a lone voice on Euro-collapse, The Slogger is being joined by many heavyweights. A consensus is emerging.

The FT’s Wofgang Munchau yesterday evening wrote a fine piece on why the Euro will go down and down. Annotated excerpts follow:

‘…some of the world’s smartest investors are convinced the euro has only one way to go: deep down….this flies in the face of a previous consensus…This is a story about what will happen to the Eurozone beyond Greece…the Belgian prime minister, has proposed a European debt agency…none of it may ever happen because of political and legal constraints.

‘German constitutional law imposes such tight constraints that any dilution of the no bail-out clause in the Maastricht treaty or the price stability target of the ECB might trigger a forced German exit. The most one can hope for during the next 10 years is improved voluntary co-ordination in the European Council [your read it here first]….The Greek state – the sum of its public and private sectors – is just as bankrupt today as it was a week ago…(either)…the eurozone would risk a private sector depression…(or)…all the adjustment comes through the eurozone’s current account balance, which would turn from slightly negative to strongly positive. It is difficult to see how this could be done without a significant further devaluation of the euro.’

Well said that man. Wolfgang concludes:

‘Whichever scenario you choose, the Euro is going to be weak. Even if the Eurozone were to allow more serious slippage in budgetary consolidation than I have suggested, that would probably not help the Euro either, as markets would start to doubt the longevity of the currency union for political reasons’.

Sanity is alive and well and living in Germany. Errr, and in Slogger’s Roost.