Managing the Euro crisis

You have to stand in line quite a while if you need an ATM in Athens. Ordinary folk are getting cash out in advance of Sunday's elections. Some say up to 900 million dollars worth of Euros is being withdrawn from Greek banks every single day. The Greeks are scared that the party that wins might refuse to cut public spending which would wreck a Europe-wide bailout of the Greek economy. So they'd rather have cash under the bed or in a well-stocked food cupboard than a balance in a risky bank.


This week Spain received a bail-out from Europe worth up to 120 billion dollars - but the credit ratings of its largest banks have nonetheless been downgraded, and the country is still awash with debt. The rescue did little to calm the markets. Spain's financial woes are "de alto riesgo" - that's very high risk.

And then there's Italy. Bailing out a nation that has been mismanaging its economy for so long might cost an extra 750 billion dollars. We are now talking absurd telephone numbers. And all for what? To preserve a currency barely a decade old, that was only introduced as a device to stabilize exchange rates and make the European market a fairer place to trade.

Britain didn't join at the start and wouldn't even contemplate it now. There would be a riot if any Government over here tried to sign us up. But in the name of saving the Euro, the most fervent pro-Europeans are now pleading for even greater integration of rules and methods and tactics - because that is the only way to make a single currency work, by forcing all 17 national participants to operate in exactly the same way by exactly the same rules. Which is exactly the insuperable problem.

Unless you can make the Greeks, the Spaniards, the Italians behave just like the Germans and work hard, save hard and be prudent then you have a recipe for disaster. This crisis has been around for two years plus. We've heard it all before. But that doesn't mean it isn't relevant. And that doesn't mean it isn't going to hurt us all. The best advice is that it will get worse before it gets better. Don't say I didn't warn you.

This is Ed Boyle for CBS News in London.

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