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Will The Euro Survive?

The stock markets decline coupled with an economic slowdown not seen in two generations has left some countries reeling as tax revenues shrink while expenditures keep climbing at an astronomical pace to try and weather the storm.

While not mentioned much in Canadian and US media outlets, countries that are on the brink include Ireland, Greece, and the Czech Republic, all Euro zone countries.

By joining the Euro Zone, these countries have given up some of their econonmic freedom as they cannot run enormous deficits, increase their debt load beyond certain levels and have limited control over interest rates.

Should any country default on their debt, the rest of the Euro Zone countries will have to pick up the slack. If one country fails, similar to the story of the US banking system, another will quickly follow. France and Germany may begin to wonder if it is worth their while to keep these other countries afloat financially.

The US has been running up enormous deficits but the US dollar has been gaining strength and may continue to do so as the weaker Euro countries try and survive.

What are your thoughts? Will the Euro survive? Your comments are greatly appreciated.


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