The problems of Greece are still being debated far and wide, but The Slog is moving on. The ‘PIGS’ problem (Portugal,Ireland, Greece and Spain) will be next to be picked up by the mainstream media, but even if these don’t blow the Euro out of the water, meltdown in northern and eastern Europe will collapse the EU before its finished…if the EU authorities miss the boat as they so spectacularly have over the problems in Athens.

The summary issue in these former Soviet bloc countries is not one of overspending, but of never having had a strong enough private sector in the first place. Hungary, Rumania and Latvia all now have Euro debts owed to foreign banks which they cannot repay without massive devaluation and wholesale debt rescheduling. This is the classic vicious circle, but observers like me said from the start that only EU hubris allowed such States into the Union in the first place. The decision to steam in first the USSR and then Yeltsin Russia fell to pieces was always going to come back and bite the gonks in Brussels.

If you haven’t been there already, there’s a terrific piece by Michael Hudson in the FT this morning, arguing the case put by The Slog for over six months now: that Eastern and Northern Europe’s former satellite States are in deep trouble. He notes that:

‘No one wants to accept the fact that debts that cannot be paid, will not be. Someone must bear the cost as debts go into default or are written down, to be paid in sharply depreciated currencies.’

And yet, once again today the FT carries a prominent front-page piece headed ‘Revival hopes beat sovereign debt fears’. It does make you wonder at times.

If you really want to depress yourself, then think on this: the Greeks have overspent, and the former USSR satellites have not built up a big enough private production economy. The UK has both these problems.