I'm aware of that but as you know there are powerful forces in Europe who, for their self interest, will do all they can to foment an anti Euro sentiment in countres like Germany. There is a lot of ammunition for their campaign in news like this and its ramifications.
I think they go back to the currencies they had (the mark, lira, drachma, franc, etc.) I don't think they join sterling.
It looks like the EUR will go to the trashcan during the good years not the bad ones as people seem to consider it a safe haven now and trichet has pulled the typical central banker play of talking hawkish while easing like mad
I think that may happen one day but imagine Spain withdrew from the EUR zone today - what would happen to the new Peseta? It would get trashed. Spanish gov. bonds yields go through the roof. Spain would be closer to economic Armageddon than ever.
http://www.spiegel.de/international/business/0,1518,602008,00.html German Banks Face Further Big Losses Germany's top 20 banks still have around 300 billion euros of toxic securities on their books and have written off only a quarter of that, according to an official survey, SPIEGEL reports. That means they face further big losses.
Bernanke said: "Listen Jean Claude, we are going to print zillions of $ because, well, all of our banks are bankrupt . You better print along we don't want the $ to get crushed." Jean Claude: " How convenient! All our banks are just as bankrupt! "
Blah blah blah this means nothing. USA is not Spain or Scottland. As long as consumers continue to buy ipods, iphones, blackberries, and click on google ads all will be well. This story is of little importance.
Haven't we learned just recently that S&P rating does not mean anything? That shop should be closed because they were the major contributor to the current financial crisis. They should have no business in rating anyone or anything anymore.
Spain is not going to leave the blanket of the Euro currency. There is no incentive for them to do so. The risks would be much higher. It would be like California leaving the Federal government. When it comes down to it, the ECB will support Spain.