So farewell, then, Greece...Euro next?

Einstein is alleged to have said ‘Insanity is doing the same thing over and over again and expecting a different result’. So we must accept that the EU has gone completely off its collective trolley in dealing with the sovereign debt crisis.

The Germans have again been shanghaied into stumping up more gazillions to get the Club Med out of the poo. But what are the realities? We have said here a number of times that Greece is beyond redemption. Cyprus is the same but too small to affect the situation. Greece can’t continue in the Eurozone. It can’t pay its debts. The obvious solution is for it to leave the Euro and reschedule its debts. This does not mean default as such; simply that the creditors will have to wait a few more years for its money. Of course, Greece will not be able to borrow on the world money markets, but an enforced diet of austerity is just what the bloated old crook needs.

Spain is the victim of its own dishonesty, especially in the property market where it allowed speculative building to boom off the back of artificially cheap money (as did Ireland) and then fouled its own nest by dispossessing more than 50,000 expat house-owners through corrupt planning and land transfers by their own officials. But their problems are not beyond recall, neither are those of Italy and Portugal. But apart from Greece, which is bust, the problem with Club Med seems to be liquidity rather than debt.

Ireland seems to be coming out of the woods, mostly because of the admirably determined and courageous way they have tackled their problems, and partly by telling Brussels to go forth and multiply when it tried to force the Irish into giving up their favourable corporation tax regime – the main plank of growth and recovery.

European banks, especially the French, will almost certainly take a crew-cut over sovereign debt rescheduling but this won’t bother them too much; as we know, modern banking is gambling with the customers’ money, keeping the winnings, but passing on the losses to the tax-payer.

When we had our banking crisis in 2007/8, there was much gloating from the French. Not enough regulation, they said (you know how much they enjoy regulation). ‘We order things much better in France,’ they would say. Today the big French banks have lost a third of their value. Societe Generale bought a Greek bank that had been owned by the army (I thought that it was only in places like Burma that the army ran commercial enterprises), as did Credit Agricole. Both were up to their ocksters in Greek bonds that are likely to end up nearly worthless.

The latest victim is Dexia, a giant Franco-Belgian bank; it seems to have acquired a huge liquidity problem along with a huge amount of Greek debt, and is hitting the inter-bank lending famine that caused our crash 3 years ago.

The Paris and Frankfurt stock indices have both fallen by 25% in the last quarter.

Oh dear. But then, déjà vu is French, innit? Schadenfreude pour moi!

In fact, the UK economy seems much stronger than the doomsters tell us. The 10-year bond rate is as strong as it has been for 60 years as money leeches out of Europe; the AAA  rating has just been renewed; the GDP-debt ratio is relatively low; and most Government borrowing has long-term redemption dates, so is clear of the debt crisis facing the sick men of Europe.