Both politicians and bankers like to tell stories. Sometimes they use the stories for votes or to get you to buy some products. The stories have classic formula. They are about good and evil, about rescues and mostly with happy endings. To be honest this is a real talent for both groups.
From my point of view the stories they tell can be divided in two. First, almost all the time they have a story about how the economy is much better than we think or about a near future improvement from current tough times.
The other type are those when they need either your support or they need you to buy something from them. Here a typical plot would start by showing you a very grim and difficult period ahead for which they alone have the solution. Then they will look for your support or want you to buy a product to save the world (or company).
We have seen both types in the last few years both in Romania and abroad. But the last few months are full of doomsday scenarios for the aftermath of EURO breakup. Obviously the message from most politicians and bankers is that if EURO fails the world fails. Or close to that. The last piece of research alluding to this is done by UBS(64020390-xrm45126): EURO break-up – the consequences. And let me tell you those consequences are not fun. Here is something from the political cost of EURO break-up “It is also worth observing that almost no modern fiat currency monetary unions have broken up without some form of authoritarian or military government, or civil war. “. This is tough, EURO break leading to civil war. No one wants that. SO, please let just pay the bill and save the EURO.
But is it really like that? Are those stories real scenarios or just fairy tales?
Here is a detailed look at monetary unions. There have been many and now most are gone. It does not seem that the world has collapsed from their demise. Au contraire.
Next time a politician or a banker tries to sell you a story ask them what’s in it for them. Most of the time those stories are just fairy tales. If EURO were to break-up it would be hard but not impossible. Already the world it has been dealing with economic malaise for the last three years. Nevertheless I do not think EURO will break-up just yet. Rather it will have to change the line-up. Some “players” are either just too old or out of shape and they need to be pushed out to lower leagues. Maybe if they work hard they can be once again promote it. But why would they want to?