headhonchoII wrote:Germany and France will bail out Greece. There will be instability in the Eurozone but it won't be abandoned, it's part of a political aswell as economic model. If countries dropped out of the eurozone they would still have to pay their debts, their new currencies would be weak as hell thereby potentially creating more problems than it solved.
The UK is not in the Eurozone and it's currency may face a run in the next year because of the relative size of it's economy compared to US/EU. So there are persuasive arguments either way.
I agree. Greece will do some, Germany and France will do the rest.
Also, it is a very very important point that the Euro is a political project, and not purely an economic one - IE as long as the opolitical will is behind it, it will survive.
Without sounding foolish, I think that the downside for the GBP is limited. A new govt and credible decifit cutting plans (something both Gordon and David are committed to) will stave off any worries about currency or economy collapse in the UK.