Thursday, 25 August 2016

Economist Joseph Stiglitz on the failure of the euro

The Telegraph´s Jeremy Warner has a good piece about a new book by economist Joseph Stiglitz:

As the economist Joseph Stiglitz, notes in a compellingly argued new book on the failure of the European project – The Euro, and its threat to the future of Europe – on virtually every occasion when voters have been directly consulted, they have rejected the idea of further integration.
And in each case, whether it was introduction of the Euro or reform of the constitution, they have been ignored. --

Six years after the start of the Eurozone crisis, the economy is still deep in the doldrums, with output in some nations a pale shadow of its former self, shockingly high levels of youth unemployment and what growth there is now almost wholly dependent on the drip feed of central bank money printing.
How did things get so bad? In his book, Stiglitz convincingly demonstrates that the root cause of virtually all Europe’s economic and political ills was the premature introduction of the euro.
In itself, this is not a particularly new idea, but Stiglitz lends it virtually irrefutable intellectual backing.
To begin with, things seemed to go swimmingly, with all member states apparently growing richer together. But far from leading to convergence among national economies, the single currency was beneath the surface driving a dangerously destabilising process of divergence.
Structurally, economies were growing apart, not together, with the Eurozone ever more precariously divided into surplus and deficit nations.

Read the entire column here

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