Chris

The French economy is very much of the south, not the north, and if the economies of the Eurozone do start to fall like dominoes, the French is likely to go down right after Spain and Italy.

The heart of the Euro is not a union of the Franc and the DM, no matter how much posturing the French may indulge in. The Euro is now, to all intents and purposes, a currency peg system in which the national currencies of the members are welded to the value of the DM. It is the strength of the DM hiding behind the name "Euro" and next to the weakness of almost all the others, that is the problem.

One possible solution to this mess would be for *Germany* to leave the Euro, possibly taking Finland and the Netherlands with it, and forging a new "Northern Euro" if they remain wedded to the idea of being in some sort of currency union, leaving the original currency as a "Southern Euro" which would rapidly float down to a competitive level against the north.

However, we know that Europe's political clique would never actively pursue such a policy, because fundamentally the Euro is a political project, not an economic one. If it doesn't serve to lock Europe together as one, then it doesn't serve its purpose at all. So they will continue flogging the dead horse until Armageddon.