With EU currency and bond markets in turmoil, Lady Thatcher’s famous aphorism rings very true. For many months, the euro has been taking a hammering as its constituent members find their economies diverging so starkly – without the scope for currency adjustment to boost exports.

The current state of both the Greek and Irish economies is dire. Both have imposed harsh public expenditure cuts to reduce their excessive public debt. But yields on both Greek and Irish bonds continue to soar as the markets adjust to the risk of default. In Ireland’s case, its 10-year bond is now yielding around 8.2%, compared with just 2.6% in Germany and 3.3% in the (non-Euro) UK.

The Celtic Tiger of the past, whose banking system is on its knees, now faces pay-back time. Despite vigorous denials by the Irish government, it is expected to receive a massive bail-out from the EU in order to save the euro from collapse. The euro’s fate will depend largely on the European Financial Stability Facility, which – along with the promised IMF support - is probably robust enough to prop up Greece, Ireland and Portugal, whose plight is almost as grim.

Most concern will focus on Spain, whose economy is far larger – and therefore far more capable of collapsing the Euro. Hence, saving the euro in Spain is of paramount concern to the EU, especially since European banks have an estimated £750 billion exposure to the Spanish economy.

If there are widespread bond defaults in the weaker EU countries, the impact on many leading banks, especially in Germany and France, will be devastating. The size of the ‘haircuts’ would do immense damage to their already stretched balance sheets. Neither are UK banks immune, especially the 83% state-owned Royal Bank of Scotland (RBS), whose share price has weakened to just over 40p. What a mess – you really can't ‘buck the market’.