JANE BURGERMEISTER REPORT: ‘Euro is running out of time’

Euro is running out of time

 

Roger Bootle, The Telegraph

They can try to ‘delay and pray’ but the euro is running out of time As a doomsayer from the start, who has written several times on the subject, I have recently been reluctant to burden my readers with more jeremiads about the euro.

But fasten your seatbelts. Here I go again. My excuse is that this crisis keeps surprising the unwary. There is so much to say that I will have to have several bites.

Before we can find solutions, which I will discuss at a later date, first the causes. Why is the euro in crisis? Because it was fundamentally flawed at its inception. Only good luck, strong economic growth and enlightened economic management could keep it together. In fact, the eurozone has had to suffer the opposite of all three.

Giving up sovereign currencies is a serious challenge. Exchange rates act as a safety valve. When you remove them, the pressure either has to be reduced or it will find some other way out. In a fixed exchange rate system, such as the ERM, currency speculation could and did break the system. Advocates of the euro project drew comfort from the fact that, by contrast, a full monetary union is immune from such attacks.

Read more at: www.telegraph.co.uk/finance/comment/rogerbootle/8544970/They-can-try-to-delay-and-pray-but-the-euro-is-running-out-of-time.html