Douglas Carswell's Blog

Laws of maths still apply - even after Euro summit

When Silvio Berlusconi quit as Italian Prime Minister a month ago, Italian bond yields were lower than they were yesterday. 

Far from fixing the problem the way many of the media pundits implied, appointing Mario Monti leader has left those willing to invest their own money in Italian debt with even less confidence than when the clown was at the helm.

Italian bond yields - a measure of risk - have spent most of the intervening month in the stratosphere, only falling back because central bankers have been buying Italian bonds with printed money.

Rather like the Euro summit last week, this is yet another illustration of how a problem of finance and maths cannot be solved by politics and communiqués. 

2 + 2 does not equal 2 trillion, whether your Prime Minister is call Silvio or Mario - or even David.

The way out of the Euro debt crisis is by exiting the Euro.  As long as the Euro remains intact, millions of Europeans can only look forward to a life of crushing debt and falling living standards.

Allowing Italy and others to re-establish their own currencies, managed to suit their own needs, would enable Italy to prosper.  Hundreds - perhaps thousands - of Italian businesses with world class products would suddenly become vastly more competitive and flourish. 

The politicians might not yet be saying it, but the maths says that default and decouple remain Europe’s least worst options. 

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