News from Portugal:

Portugal yesterday became the latest EU country to admit fiddling official data on a huge scale to evade spending rules.

Jose
Socrates, the new socialist prime minister, said it was time to tell
"the truth" about the dire state of public finances left by the
outgoing conservatives.

"The information which
we have indicates that the deficit will be well above 5pc of output and
very close to 6pc," he said. The true deficit is twice the declared
figure.

Leave aside the nonsense about the stability pact for a moment and look here:

By joining the euro before it was ready, Portugal has
become the first serious casualty of monetary union. EMU had the effect
of slashing interest rates in half, causing a property and credit boom
that has now left the country with a painful hangover.

Portugal
has been trapped in slump since 2001, slipping back into outright
recession late last year. Draconian spending cuts were enough to
provoke the Portuguese navy to recall its ships to port as a mutinous
protest in 2002, but have still not been enough to close the budget
gap. Mr Simpson said the country was now caught in a vice. "They can’t
devalue their way out of trouble as they used to every five years, so
they’ll just have to deflate through it the hard way," he said.

Joining the euro meant giving up control of interest and exchange rates. Simply not a good idea. My, my, the europhiles must just be hugging themselves with delight at the success of their bright little political idea, eh?

Update: Of course, slaps head, the person who has to sort this out is Jose Barroso, the President of the European Commission….the ex Prime Minister of Portugal, responsible for the mess.