The euro, how long will it survive?
Was the Euro a good idea? Based on the data so far, no it wasn't. The Eurozone is not looking like an optimal currency area, just as EUsceptics said it would not. It might still be able to survive, but only if there is enough political will among the members states in order to bear the pain. This is unlikely, they have no reason to take the blame for trouble that is not theirs when all the perks of office could be at stake. The Euro probably won't survive long term, and when that goes so will the EU.
posted by chris at 8/16/2007 11:03:00 pm
1 Comments:
I agree. Even experts recognise the EU is larger than the optimum currency area. The Euro could only work if economies had developed alongside each other and were near identical like the USA did successfully, but the EUropean economies are too developed and divergent for a single currency to work.
In a debate with an economist i once suggested the same number or arguments for the Euro could be made for two UK currencies for north and south England! He conceded that enabling the north and south to appreciate/depreciate independently would re-balance the economy and boost the northern economy, albeit a pain to have two currencies.
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