The Coming European Meltdown

Photo: Bloomberg News

Is Europe Heading For A Meltdown? -- The Telegraph

This financial crisis is worse than the sub-prime crash of 2008 because the sums are so much bigger and it is governments that are in dire straits. Edmund Conway explains the dangers.

Mervyn King, the Bank of England Governor, summed it up best: "Dealing with a banking crisis was difficult enough," he said the other week, "but at least there were public-sector balance sheets on to which the problems could be moved. Once you move into sovereign debt, there is no answer; there's no backstop."

In other words, were this a computer game, the politicians would be down to their last life. Any mistake now and it really is Game Over. Or to pick a slightly more traditional game, it is rather like a session of pass-the-parcel which is fast approaching the end of the line.

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My Comment: Decades of deficit spending and borrowing money has now caught up to a number of European countries. To pay .... or pay not .... that is what many governments are now pondering, and I would not be surprised if some of them will decide to not pay.