15th September 2011
What would this recession ‘beyond comprehension' look and feel like.
Well before things get nasty it's likely the world's other economic trading blocs are likely to consider a rescue package. Evidence being that China is already reported to be considering buying Italian bonds and assets, and that five big developing countries said they were ready to discuss bailing out Europe.
The leaders of Brazil, Russia, India, China and South Africa – the ‘BRICs' countries – are to meet at the annual World Bank and International Monetary Fund summit next week to talk about providing emergency assistance.
Robert Zoellick said: ‘Unless Europe, Japan, and the United States can face up to responsibilities they will drag down not only themselves but the global economy. They have procrastinated for too long on taking the difficult decisions, narrowing what choices are now left to a painful few.'
Unless fiscal unity – where Greek, maybe even Spanish, Italian and Portuguese debt becomes subsumed into a big European pot – is considered it's likely that the euro will collapse.
A new EU treaty?
The Daily Mail predicts that if the euro fails then the stronger European economies may form their own exclusive trading and financial bloc, if so the UK could become a new EU financial partner. Although with a coalition government that is split by fundamental differences in their approach to Europe this could prove tricky.
Dragging the banks down