Euro Crisis an Opportunity for Britain

While Britain was chuckling about custard pies this week, the debt cancer was metastasising across the Mediterranean. Bond yields in Spain and Italy have surged, leading to doubts over whether those countries can meet their existing liabilities. For the first time since the euro turmoil began, EU leaders are panicking. While Greece takes up just 1.9 per cent of the EU’s economy, Spain and Italy account between them for 24 per cent. A default in Athens might be a controlled explosion, but Rome and Madrid cannot repudiate their debts without blowing the entire European banking system to smithereens. The effects of such a blast would be felt far beyond the eurozone. The Bank of England, dispensing with its normally staid vocabulary, describes the turbulence as a “serious and immediate risk” to the United Kingdom. The IMF frets that, if EU leaders carry on with hand-to-mouth bailouts, the resulting crash might trigger a global recession.