Is The Euro Screwed?

by Zoë Pollock

John Lanchester thinks Greece could doom it:

The euro was not designed to default, so when Greece does, other European countries who have had to ask for non-bailout bailouts – Ireland and Portugal – will have their ability to repay their debts questioned. If one or other of them undergoes a ‘rollover’, or ‘restructuring’, or ‘rescheduling’ of its debt – all polite words for default – the next country in line will be Spain, and that is where everything changes. The ECB/EU/IMF ‘troika’ can write a cheque and buy the Greek economy, or the Irish economy or the Portuguese economy. But Spain is the world’s twelfth-largest economy, and the ECB can’t just write a cheque and buy it. A Spanish default would destroy the credibility of the euro, and quite possibly the currency itself, at least in its current form.