On one hand, the EU sells capital equipment to the US (and O&M deals for it). If those deals become unprofitable overnight...
On the other hand, American oil imports would fall off a cliff, which would avert/abate the next oil shock. Whether the EU would be institutionally capable of using that breathing room to its advantage is less clear.
So in the short term, much depends on a number of unknowns, including the precise order in which events happen (most economic events are non-commuting, a fact that quackonomists will happily ignore).
In the medium term, if the € becomes the major currency targeted by countries pursuing a neomercantilist industrial policy, there is no reason to expect the current generation of leadership to perform any better than their American counterparts. One can hope that parliamentary democracy will prove more resistant to quackonomics than the form of elective monarchy the US seems so fond of. But I would not be willing to bet my pension on it.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
One can hope that parliamentary democracy will prove more resistant to quackonomics than the form of elective monarchy the US seems so fond of. But I would not be willing to bet my pension on it.
