Just as Earthquakes are inevitable so is Greece's exit from the Euro

Even before the Euro started I knew it was going to fall apart and if anything I’ve been more surprised how long it has lasted rather than that Greek is set to leave.
Because any engineer knows the simple principle: “if it doesn’t bend it will break”.
That is why any large structure is built with movement joints. Without the movement joints, stresses build up and eventually some part not designed to move will crack potentially leading to catastrophic failure. So, e.g. a house built on variable foundation materials will tend to find that one part of the house sinks relative to another. That movement might be less than a millimeter, but by the time that movement translates to the top of the house, it can become quite a substantial crack.
And the only other viable alternative to movement joints is either to have the foundation so strong that the structure cannot move (which is usually impossible or impossibly expensive on large structures) … or to actively jack up that part of the structure which is sinking – such as they are doing at massive expense to the ground under the leaning tower of Pisa.
All large structures have these kinds of stresses. If you look down at the road as you cross a bridge you will see a section of metal with two interlocking sets of Combs. These allow thermal expansion – but also differential movement of the earth either side.
Some Economic Maths
I’m going to try to explain how currencies work. This is a vast simplification, but hopefully you will get the main points.
Let us suppose we have two economies each with two worker. For simplicity, we’ll assume they are farmers. In the first economy the weather is cool, the culture is austere and to keep warm the farmer keeps active and works 10 hours a day. In the other, the day time temperatures are hot, they enjoy their wine & women and generally they have a good life without producing much.
Each country has 1000 units of currency. And because of the hard work of the austere country they keep amassing wealth, and that wealth has been invested and now they have lots of farm machinery. So now, for each day the farmers works, they produce twice as much as they did. Soon they have twice as much wealth and the value of each day’s work is twice has high as it was when they started. But as they still have the same amount of currency – each unit of currency is backed up by twice as much wealth.
Sometimes one farmer needs help with the harvest. So he must employ someone. But Because his own fellow countryman is so productive he either needs to employ his his fellow countryman or BOTH people from the other country. So, it stands to reason, that his fellow countryman can charge twice the amount for his wages as those in the wine & dine culture.
But in the wine & women economy … well … they are not that concerned with making money and the wealth behind their 1000 units of currency is just the same.
Now if these two countries have separate economies, then it should be easy to see that the country with twice as much wealth has twice the purchasing power and so it’s currency would be worth twice as much as the country whose economy had stagnated. Internally the wages of the workers in each country stay the same relative to each other. But the workers in the austere country are now paid twice as much as those in the wine & dine culture. And so, paradoxically, because the currency reflects the value, those in the austere country regularly employ those in the wine & dine culture even though it takes twice as many of them to do the work.
However, what would happen if the two currencies were linked together? First, the value of the currency would have increased, but with only 3 units of wealth for 2 lots of currency, the value of their joint currency would only have increased around 50%. But the farmer in the “wine & women” culture is now competing with the austere culture. In theory you’d expect to see similar jobs getting similar wages, but the worker in the austere country is literally worth two in the wine & dine culture. And worse, with so much more goods from the austere culture the market it flooded and the wine & dine culture is hardly getting a look in.
What is actually happening is that the value of the currency in the wine and dine culture is too high.  This means that the population is likely to be paid more than the going rate globally given the economic value of those workers. And because people hate having wage cuts and because that means the economy can’t self adjust through currency change, the impact of having wages far higher than the global value of those workers is that unless they will accept massive pay cuts, then they lose their jobs.
But the opposite happens in the austere economy. Because the wine & dine culture is pulling down the exchange rate, they find it easier to sell their goods because their currency is rated lower so that the workers are being paid less than the global economic value of those workers. So, wages are in effect being kept artificially low which means their economy booms.
And this is the fundamental reason why a single currency was a crazy idea. Europe is not anything except a line drawn around some totally unrelated national identities. Europe doesn’t have a single culture and it certainly does not have a single economy.
It was therefore absolutely certain that if all the various economies were shoe-horned together into one currency, that those countries with strong economies would get stronger and those with weaker economies would get weaker.
How real countries work
The only way a real country can exist within a single currency, is that either you get massive massive inequalities which are then compensated by mass population movements (as we’ve seen from the former coal mining areas in Britain to London). And/or … the stronger parts of the economy massively prop up weaker parts (as we see between England and Scotland ) **
**[Although in this case, much of the problem is that Scotland is paying money to London which is then spent in London boosting the SE and if the benefit of the UK government spending were spread out, there would be much less need for those in receipt of government welfare to the rich in London to prop up economies outside the spending reach of UK government].
But of course, the EU does not have the necessary massive system of transfer payments, so Germany continues to get wealthier and poorer countries like Greece continue to get poorer and this will continue as long as they are in the Euro.
In other words, Germans are profiting from the problems of the Greeks, and it will continue to profit until either the Germans are taxed until they are as poor as the Greeks …. or the Greeks have the gumption to realise they are better off outside the Euro.
Political earthquakes
I can’t see the austere Germans subsidising the Greeks. So inevitably we will see ever increasing stresses between faster growing economies and slower ones until one or other jumps out. And so, whilst Greece is the first country it will certainly not be the last.
Indeed, assuming the social pressures are similar, we can more or less predict the date of departure of the various countries based on their differential rate of growth with the main bulk of the Euro. Eventually in theory all countries would leave – although as the EU already has a modest form of “unofficial” transfer payments in farm subsidies, this might delay the date of departure beyond anyone’s lifetime for countries with very similar cultures and economies to Germany.
But just as earthquakes are inevitable, so the economic movement to realign the Greek and German economies is inevitable.
Earthquakes
So, I can guarantee 100% that Greece will leave. It might not be this year, but because the economic stresses are constantly building up and they cannot be stopped by the EU – but are in fact made worse by being in a single currecy, like the stresses that cause earthquakes build up steadily, so the disparity between the “Greek” tectonic plate and the “German” tectonic plate can only be resolved by a movement in the relative value of their currencies.
The conspiracy theory
In judo, you use the strength of an opponent against them. So, if an opponent is much stronger, the aim is to push them and as they push back, to turn and then pull them so that they are helping you throw them.
Likewise, I’ve often wondered, whether John Major’s enthusiasm for European enlargement and lack lustre criticism of the Euro, was actually intended to derail the European expansionists. In other words, did he know full well that with so many disparate economies all tied together in the Euro, the European Nightmare would fall apart all the sooner?
And so isn’t it odd how the Tories have been “forced” into a referendum this year just as Greek looks set to lave the Euro!