Last week, I was in America for the commemorations of 9/11. Swept away by a tide of raw emotion in New York, for the moment I forgot -- maybe we all forgot -- the even greater crisis facing both our countries and indeed the whole western world: the mountains of sovereign debt which threaten to blow the Euro apart and send all of us spiralling down into another recession. This week we are back to that reality, and to be honest no one can see a way out of the mess.
The problem centers for the moment on Greece, which is simply in an impossible position. Their interest payments next year are forecast to be around 19 billion dollars. But their economy is shrinking, unemployment is rising fast and the cuts imposed to try to balance the books are making things even worse. One Greek commmentator wrote this week: 'You cannot milk the cow five times a day.' The expectation is eventual default, with the poor country simply unable to pay its debts.
A financial specialist told me that the most the Greeks could afford to pay is ten cents in the dollar. So the banks take a massive hit and Greece is forced out of the Euro. And who is next? Ireland, Portugal, Spain and Italy each face an impossible choice. Cut spending, which further depresses the economy, the tax take falls, and then they need to cut again. Some predict not just the disintegration of the Euro, but the collapse of the European Union, followed by economic meltdown and rampant nationalism - and we all know where that can lead around these parts.
Meanwhile the explosion caused by a collapsing currency will send out an economic tsunami which will reach your shores as well as ours. And last week, I saw enough of America to know that you are in no condition to absorb any further shocks. This is Peter Allen for CBS News in London.
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