David McWilliams: Small savers will pay price if euro goes into meltdown
Published 30/11/2011 | 17:00
This crisis is likely to culminate with capital controls re-imposed in Ireland, following a Europe-wide run on the banks. This bank run will be an accelerated and panicked version of what is already happening right now. Money is likely to leave all the major banks of the eurozone with the exception of German banks.
This is because savers fear the breakup of the euro will leave them with "cheapened" savings in their own countries. Obviously, the corollary of this should be a wall of money flooding into Germany because -- whatever happens -- the currency that Germany will eventually trade in will rise against all others.
And so we are likely to see a massive credit crunch all over Europe because without funding, lending will dry up.