April 12, 2005

Tim Worstall: The Joys of the Euro.

typically good writing by Tim Worstall on the Joys of the Euro. This is based on an article in the Telegraph about how the one size fits all interest and echange rates of Euroland in fact fit none of them. This was obvious to everybody from the beginning, Mr Worstall points out that a single interest and exchange rate isn't optimal for even the UK let alone such disperate economies as Spain and Germany. however it was also obvious that the Euro is a political project rather than a economic one as a step towards a nation state of Euroland. Mr Worstall ends on a particually pity note
Italy’s screwed.

Aren’t we lucky little people, having the continental economy screwed in the name of a political project?
with a rather gloomy outlook also present in the Telegraph article:
Stephen Jen, an economist at Morgan Stanley, said there was a growing risk that the effort to rebalance the global economy to wean it from dependence on American growth may now be done through an ominous "balancing down" rather than "balancing up".
The European Central Bank can do little to boost demand since interest rates of 2pc are already at 40-year lows and barely above the rate of inflation, now 1.9pc.
the Japananese dease anyone?


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