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The overdue breakup of the Eurozone would be a huge positive for the continent and the entire global economy, writes John Bollinger, editor of Capital Growth Letter.

The euro was a poor idea that united widely disparate economies without recognizing that the economies were fundamentally different from one another or providing adjustment mechanisms to deal with the differences.

The rule was "You're all little Germanys now!" The original list of 11 countries adopting the euro was Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, and Spain. At least two of them require bailouts, Ireland and Portugal, plus Spain looks to be in well over its head and Italy remains on many watch lists. The odds look good that there is a lot of pain in the offing.

Thinking about the current crisis practically, there are really only two big economies backing the euro, France and Germany. Though both are still rated AAA, France has had to deny publicly that its credit rating is in danger of a downgrade and is most likely well along the path to a downgrade.

So the $64 question is: Are France and Germany strong enough to shoulder the debt problems of all the other countries using the euro? My guess is no. I suspect that it is only a matter of time until the euro breaks, and when it breaks European Union will be in danger too. (This could take the form of a country leaving the euro, devaluating its currency and restructuring its debt.)

Eurosclerosis Prescription: Divorce
This is important: I think that the abandonment of the euro and dissolution of the European Union would be a good thing, in fact a very good thing. First of all, it would restore some of the most basic signaling mechanisms, exchange rates, capital flows, and interest-rate differentials in local currencies. Second, it would restore competition, the prime driver of creativity, productivity, innovation, wealth creation, and prosperity. Third, it would be a crushing blow to schemes to promote socialism across Europe and thus an antidote to Eurosclerosis. Fourth, it would dismantle at least part of a huge bureaucracy that stifles growth in the region.

In short, the potential collapse of the euro and the dissolution of the EU would be hugely bullish for the countries involved and, by extension, for the world as a whole. Frankly, until this happens we will be plagued by the problems in Europe as Germany's and France's shoulders are simply not broad enough to support the entire system in crisis. Yes, there will be tremendous angst and huge dislocations caused by dissolution, but the change will amount to a new beginning for Europe and its neighbors and will be a shot in the arm to the world's economy.

[Count John Mauldin and Michael Shulman among the pundits who believe Europe’s travails are far from over. In his last excerpt, Bollinger argued that market fears regarding Europe were overblown. That was six weeks and 90 S&P points ago—Editor.]

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