...and why its going to hurt like hell.
Its quite easy to grasp from a British perspective. Lets say we joined the Euro in 1999.
Interest rates would have been lower, thus the bubble would have been bigger. And the bubble burst would have been even bigger, (and I dont just mean stuff like houses ect. The government would have gone on a bigger bender as well, the state would at this point be even bigger.) and remember the UK is massively bigger in proportion to Ireland. Just do the math.
And whether you agree or disagree with the bank bailout and QE, we can only do this becasuse we have our own currency, in fact we are signed up to the Maastricht treaty on Govt. debt which we have thrown out of the window, because we cannot be stopped.
Things are bad but they are not Ireland bad yet. I suspect the bond markets are going easy on UK gilts at the moment, the BoE has the market cornered at present (forcing the banks to build a new capital base in Govt. debt) but this will not last, when the QE ends, interest rates have to rise, and the market will have a long memory. At the moment I feel they are giving us the benefit of the doubt and are pricing in a new goverment to deal with public spending. If they dont get this and Brown pulls it off, they will be out to punish him and us.
The boss HSBC thinks its definatly a double dip reccesion, and they are the only bank really worth listening too, even though they are decamping from london to Hong Kong.