Europe, even more than America or Britain, is caught in the global financial storm and if the world suffers another blow in the months ahead, comparable to the collapse of Lehman Brothers, it is most likely to involve a crisis in the eurozone. Is it possible that Europe, whose biggest economies – Germany, France and Italy – never experienced an Anglo-Saxon style housing and credit boom, will suffer more damage than Britain or the US?
There’s plenty to disagree with in his analysis (Kaletsky may be too optimistic about the relative prospects for the U.K., for example — I wouldn’t be surprised to see the complete failure of a gilts auction at some time before the summer — with all that that might entail), and overall his tone is a little too alarmist, but he is right to suggest that there is a great deal of bad looming on the European horizon . . .