Sunday, 7 August 2011

The slow death of the Euro

"The euro will bring jobs, investment and budgetary discipline". So, my fellow Europeans, do we now agree it is not working?
Sadly the Euro is unravelling and the Euro Zone still refuse to discuss whether it would be better to drop some members out now whilst they still can.
This blog has long argued that Greece is no longer able to stay part of the Euro and is the root problem.

I see little way the Euro can survive in its present form. If it is not changed now it will drag the rest of the Euro zone economy down. But do not take my word for it on one country alone - read the words of these three top French economists:
Writing in Le Figaro, Gerard Lafay, Jacques Sapir and Philippe Villin called for all nations to abandon the euro itself “to save the Europeans”.

Far from promoting the hoped-for convergence, the construction of the euro has, in fact, accentuated the differences between nations. It is time for European politicians to face up to reality: the euro is dying, and it must be finished off quickly to save the Europeans.”

It is worth remembering some of the words of wisdom on the Euro when the rest of us were fighting tooth and nail not to join it [thankfully for us we won that argument]:

"If we stay out, the price we will pay in lost investment and jobs would be incalculable."
(Peter Mandelson, 2002)

"If we get rid of sterling and adopt the euro, we will also get rid of sterling crises and sterling overvaluations. This will give us a real control over our economic environment." (Chris Huhne, 2004)

This blog has long maintained that the Euro should be split - with countries that have no hope of staying in being jettisoned. A surgical amputation is always better than the gangrene that kills the body.
It clearly does not help our economy that so many of our trading partners are struggling, nor our banks who have some exposure, but suddenly sterling looks a very good currency...