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Diane Francis Headshot

EuroMess

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PARIS -- I call it Euro-sion, but other descriptions include free fall, beginning of the end, or a boon to exports.

Whatever the label, you wouldn't sense there's anxiety judging from the crowds in shops and mood in sidewalk cafes in this bustling city.

Parisians appeared oblivious to the scary collapse and roiling markets last week as foreign exchange currencies were being marked up, or marked down.

They're wrong to be so non-plussed. The damage will hit all lifestyles. The nation-state parties are over, along with some political futures, amid the fallout after the trillion-dollar bailout of the Eurozone's "periphery." (PIIGS, Portugal, Italy, Ireland, Greece, Spain).

The bailout prevented outright collapse, as the venerable Financial Times pointed out yesterday. The Euro is still 6% above its issue price in early 1999 and ahead of its overall average.

So it's a rapid correction, to be charitable, and I would agree it is certainly the beginning of the end: Not the end of trouble but of the stupidity of the Euro-16 who naively imagined that they could create a currency, remain sovereign and not have to submit to independent audits.
(Germany has constitutionally required deficits of no more than 0.35% of GDP and Spain's hit 16% this year. Berlin is now pushing that Eurozone members adopt the same 0.35% limits by law.)

As for an export boon, that's not happening too soon. The biggest exporter is Germany and two-thirds of its business is done with European Union member countries. And as the continent shrinks under the weight of debts and bad publicity, so does Germany's export upside.

In fact, Germany's first-quarter results were so terrible they put the country in a grumpy mood. And it has been that grumpiness that has spooked markets more than anything.

The foot dragging was disastrous. Reports in Spain's El Pais quoted the Spanish Prime Minister as saying that France's Nicolas Sarkozy "beat his fist on the table and threatened to withdraw from the Euro" unless Berlin accepted a deal.

The only good news is that the newspaper business is humming. People are reading more as headline writers compete for doomsday puns and predictions of Europe's demise. Of course in business journalism, this usually means the journalistic consensus is incorrect. Let's hope so.

In the meantime, the best way to cash in on Euro-sion is to plan a holiday this year there. It's a currency bargain and the wine, food and ambience remains the world's best.

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