Is the end in sight for the Euro?

Today’s news that the Eurozone countries are preparing to shore up the ailing Greek economy drives a stake through the heart of the founding principle of the Euro.

Forged by the nations that joined on the very principle that no economy should spend beyond its means and that budget deficits be kept within proscribed limits, the Eurozone is now in danger of being undermined from within.

Intervention on this scale - even if it means that Athens does not actually get a juicy big cheque from Berlin - has now delivered a blow that can only further undermine the credibility of the Euro.

Instead the leaders of the Eurozone are on the brink of supporting the spendthrift government of Greece, determined to prop up the currency.

Eurozone now faces some startling new realities.

First the realisation at long last, that every country is still operating its own budget with its own political agenda. The lack of a central budget lies at the heart of this European contradiction. Greece cannot now sort out its own budget crisis through devaluation. It is tied to the rest of the Eurozone and it to her. There is no wriggle room.

The answer - well further centralisation and the creation of a central Eurozone budget, or collapse or what we always see in Europe - a good dollop of political fudge.

Secondly what of the other so called PIGS - Portugal, Italy, Greece and Spain?

This whole sorry story reminds me of the speculative run on Italy and then Britain during the ERM fiasco.

So which Club Med economy will be hit next by a budget crisis and the Big Two (France and Germany) stepping in to proclaim loudly to the world that the currency is safe?