This is an excellent article from Ambrose Evans-Pritchard, published in the Telegraph. Check it out!
The article, once again, highlights that austerity will not be enough to reverse the Eurozone’s debt crisis. Now the focus is on big players, like France and Italy, where the outlook is increasingly bleak. Because of Germany, the ECB is unable to act like a proper central bank (like the Fed, BoE, BoJ, or even the BoI).
Personally, I would expect to see speculators returning in a big way, probably leading to another Euro crisis. The leaves two residual scenarios:
- German reflates; Germany agrees to fiscal flexibility for the likes of France, in exchange for hard reforms; and the ECB introduces full scale QE (quantitative easing); or
- Break-up of the Euro, with risk of deep economic depression in many European countries, before recovery after several years of enormous pain.
Either way, politically, the EU must change.