Resilient euro expected to weaken against the pound

Currency forecasts. What a joke! As a small business we need to buy Euros; our own 'office' currency forecast (a weekly show of hands) has been slightly better than our Forex suppliers, including a major bank. Ours have been poor; but the Forex traders haven't had a clue! They make it up as they go along. Maybe they should change to weather forecasting?

Long after it had become evident to a number of seasoned observers (although still not to others) that Germany was trying to force Greece out of the euro, the BBC reports on Greece's Finance Minister Evangelos Venizelos complaining that some eurozone countries no longer wanted Greece in the single currency.

The Guardian, is amongst those who have belatedly noticed what is going on. It has Venizelos him noting: "We are constantly being given new terms and conditions" - picking up on more detailed Bloomberg report.

This changes the dynamics of the game, as all the member states are supposed to be keen on Greece staying in the euro. As ZeroHedge observes, the decision to withdraw had to be made by Greek's own politicians, with no detectable fingerprints from the real assassins.

Essentially, in going public, Venizelos has trumped Merkel's hand, and then upped the stakes by declaring that all the demands set by the country's international lenders have now been met. In particular, leaders of both parties in the Papademos coalition, including conservative leader Antonis Samaras, have given written undertakings that the austerity measures will be implemented, election notwithstanding.

As to the eurozone ministers and their "conference call", few details have emerged from what turned out to be a marathon three-hour session. There is talk, though, of "specific mechanisms to strengthen the surveillance of programme implementation", which may have in them the makings of yet another hurdle.

Short of the Greeks buckling, however, it looks as if the Eurogroup will have run out of options and be forced on Monday to approve – in principal – the bailout deal. Merkel and her northern allies have until then to engineer still more excuses for the Greeks to drop out.

Somebody is going to have to play a pretty powerful wildcard, as the tenacity and sheer staying power of the Greek political classes, with the backing of the EU commission, seems to have been seriously underestimated.

That card may be the Greek people, who are already buckling under the strain and have long ago lost faith in their politicians. Whether they can pull the plug, though, remains to be seen in a game that gets more complex by the hour, with many more twists and turns to come.

Adding to that complexity is the expected news that Sarkozy is seeking re-election. Slated as a supporter of Greece's bid to stay in the euro, he will be playing an intensely political game, with an eye on his domestic audience.

There, French sentiment will start to matter. If Sarkozy starts to see electoral advantage in dumping Greece, he could end up back alongside Merkel. Then we will be seeing the "motor of integration" up against the commission – the EU equivalent of a rock meeting a hard place.

Once more, it thus seems, as the very final plays were beginning to emerge, rabbits are being pulled out of hats at breathtaking speed. And most of them may be speaking Frenc

Germany has to leave the euro or the whole lot will fold within the next 5 years or so. The euro will be worth around 40p. Buy dollars.

Germany won't leave the Euro. It depends upon the weaker countries to keep the value of their currency depressed so that their manufacturers can sell exports.

Germany doesn't want the Greeks to leave for the same reasons. If the Greeks were to leave, the Drachma would fall and the Euro would rise. Germany's exports would then become more expensive.

Its exactly the same with the Chinese, they have artificially maintained their currency at a low level to keep their exports running.

Germany is pretty pragmatic and changes tack according to new data. But throughout this, there have been consistent threads.

Germany from its experience, does not want to create money without a corresponding rise in the value of assets because creating money ultimately devalues a currency.

The other theme has been that Germany does not have the resource to bailout or upgrade southern Europe, as it has done with east Germany (at great cost to its performance).

Another observation is that, yes, politicians have their points of view and agendas, but can they, with all their powers, always get what they want, even if there is agreement? Greece, even with haircuts, will never be able to complete paying off debt. Neither will Greece be able to modernise its economy within the euro straight jacket. So do your cost / benefit analyses on staying in or out, describe the utter chaos that would follow a default, managed or not, but at the end of the day the reality is that avoiding default, at some point, is not possible.

What this means for membership of the monetary union of 17 and the free trade area of 27 are separate matters, or indeed the political futures of the those currently in power, can be collectively considered once we are past this period of political denial.

For the moment, all we small investors can do is to ride the wave of liquidity being injected to support asset values, bank lending books, government funding requirements; and when reality dawns and policy changes, get out.

I consider that the euro is now about 10% overvalued against sterling due to our own problems, but this amount should not have a negative effect on our exports as the imported raw materials required will also drop in price. The real benefit that we now have is that our labour costs have not gone up.

Thanks to P Troy for a caustic take on Merkosy.

I believe it is now in Germanys interest to assist in the write off of Greek debt in return for the Greeks agreement to leave the Euro.

It was Germany and the others decision to admit the Greeks in the first place thus allowing them to live beyond their means-importing luxury goods from these self same countries using borrowed money.

Laughable is it not?

There is no legal basis for forcing a country out of the Euro--it has to be that country"s decision and therefor a sweetener will be necessary no matter how unpalatable.

The Greeks are in a stronger negotiating position than they realise.

So many expert comments. Opinions are good but facts are better if a little harder to find.

Well, it has been an interesting week, which started with the vote in the Greek parliament in the expectation that the eurozone ministers (the so-called Eurogroup) would meet on the Wednesday to approve the terms of the bailout.

The next day, though, it started to come clear that Merkel was blocking settlement, with the Germans wanting Greece out of the euro. Not least was the relative triviality of the funding gap, which was to become the battlefield. By Tuesday, it was becoming more widely known - but not to fund Managers Ashburton inJersey who yet again misreadto sitution - that there wasn't going to be an immediate decision, and that Greece was being pushed towards the exit.

Wednesday thus saw a conference call instead of the planned meeting, and an appreciation that there were serious tensions building up, with Germany, Finland and Holland pushing for the Greek to withdraw from the euro.

Then, by Thursday, it was out in the open, with Greece's finance minister Evangelos Venizelos making a public complaint that some eurozone countries no longer wanted Greece in the single currency. That, of course, left Merkel in a difficult position, having to deny the very thing that she and her colleagues were trying to achieve. Nevertheless, by the last working day of the week, the situation looks close to final, although there is an extraordinary variance in the tenor of press reports.

By now, there is a fightback going on, with forces rallying to keep Greece in the Europe, ending up with the media hopelessly misreading the position, and still indulging in anti-German rhetoric, even though the Germans have made their position clear.

And all of this brings us back to Sunday, with Booker looking back over the week, in his columnin the ST to report on how "the European project is splitting apart at the very core".

Behind all the spin, smoke and fury of recent days, we see unfolding the greatest crisis in the history of the "European project", he writes. "What is emerging is a fundamental split which threatens to inflict on it by far the most serious reverse in its 62-year history".

Thus, a wider audience will get a glimmering of what is going on, ready for the message to be drowned out in the torrent of ignorance that will assail us in the coming week.

For what it is worth, my guess is that, under enormous pressure and very reluctantly, Germany will approve the bailout at the Eurogroup meeting tomorrow, only then to create further hurdles which Greece will be required to surmount. And thus the dance will go on.

The write-offs of Greek debt have already taken place and it is just a matter of formalising it. IF anyone has any info on other countries' debts it would be interesting to know, pointers to future actions, eg Portugal is how far along the road?

Writing off the debt is one thing, quitting the euro with devaluation of currency and the ensuing repayment problems on external debt still denominated in euros (or USDs or whatever for that matter) is another.