Those who think there is little risk of a levy being imposed on other periphery members are missing the point. The seeds of doubt have been planted. As a saver facing zero yields on deposits and a potential haircut, why keep your savings in a bank? Sure it is convenient for electronic transactions, but individuals can adapt easily. As one of my more amusing colleagues put it, ‘mattresses now hold a 10 per cent premium.
There is one lesson I hope that the people of the world take away from this. And that is to remember that a single currency is not possible without a complete union of monetary policy, and therefore a fiscal and political union that is complete and comprehensive. Otherwise a powerful group will wield monetary policy for their own benefit, and the rest of the currency area be damned.