Getting The Best Exchange Rate for Euros will be an Historical Issue if the Euro Collapses – Part 1

October 31st, 2012
If the euro starts to collapse what will happen regarding getting the best exchange rate for euros, if everyone bails out of the euro, how will this affect the UK and the rest of the world? There is a whole host of debate surrounding the euro at the moment. Will it survive or will it decline into economic meltdown? Many believe the collapse of the euro could actually help the UK economy, maybe not in the short term but perhaps in the longer term.
The big problem area for the euro is Greece. If the Greek government cannot agree on how to honor its debt liabilities, it is unlikely to secure any more bailouts from its neighboring EU countries. Greece would then be unable to pay back loans secured against its national deficit and the country would go into default, resulting in expulsion from the euro currency. The knock on effect of this could also trigger other weak economies into meltdown, namely Ireland and Portugal, who are in a similar position to Greece. They could then be closely followed by other vulnerable economies like Spain and Italy, who are very much on the border line of economic collapse. Many believe the situation will be like a domino rally, with Greece being the first domino to fall in the potential collapse and disintegration of the euro, making getting the best exchange rate for euros an impossibility and a thing of the past.
So what would all of this mean for the UK and issues like getting the best exchange rate pound for euro. In the short term, Britain will certainly not be as badly effected as other EU countries like France and Germany, who Greece have borrowed very large sums from at very high interest rates – a direct result of the financial risk associated with lending to a weak economy.  Our UK banks are however still linked to Greece, through the sale of insurance and other guarantees on debt. It is highly unlikely that the UK would lend anymore money, however if it lost any money it has tied into the Greek economy, there will be a gaping hole in the UK banking system and therefore less money available for banks to lend. This could lead to another stunt in the UK’s growth and possibly to yet another credit crisis. In part 2, Best Exchange Rates UK reports further on the potential effects of the euro collapse and its effect on best exchange rate for euros.