If real interest rates in Spain are negative, isn’t it rational that the government goes into debt?

I think the euro may well unwind in stages. The most likely, IMHO, is that the 4 Mediterranean states are forced to leave at some stage.

IMHO you underestimate the psychological impact coupled with the unpopularity of the currency. The question will not be why they had to leave, but why they are allowed to have their own currency.

Just journalese I guess, and bad journalese at that.I’m probably as guilty as the rest here. However I think it is relevant to distinguish between those who don’t like the euro because they have never learnt to use it (those looking backwards) and those who are now critical since they don’t see how it can work (looking forwards). Euro ‘critics’, like constitution critics are likely to hold a very mixed bag of opinions.

My objections are purely technical. Look eg at Spain’s ballooning deficit announced yesterday. What, under the euro, can be done about this? There is no obvious answer. Questions, only questions.

Now, as to whether leaving is a plausible policy option for France, I don’t know. It is not the same as saying the UK is out, since they were never in. I think any folding of the euro would have large financial global consequences, ones which none of us want. So I don’t think this is a credible option for France now.

I think the euro may well unwind in stages. The most likely, IMHO, is that the 4 Mediterranean states are forced to leave at some stage. The reduced group might then be more viable, for more time. This would leave France IN.