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by Colman
Our dear, dear, fiends at the "non-partisan" US "think tank" the American Enterprise Institute (published in the FT.com) are terribly concerned about the prospects for the Euro, afraid that though it's doing well at the moment, pride comes before a fall - a saying they must have at the front of their attention these days - and that disparities in trade balances and loss of competitiveness to Germany will destroy us all. Or something.
The opening up of divergences in relative trade performance between individual European countries would be of little moment if the eurozone were a properly functioning currency union with real labour market mobility and true wage and price flexibility. After all, large differences in trade performance between individual states in the US do not lead to great unemployment variations between states as wages adjust and as labour moves.Chant the mantra! "Reform! Flexibility! Reduced share of proceeds to the workers!" Uh, forget that last bit. As a result, Italy’s public debt has remained above 100 per cent of GDP. More worrying still is the fact that its public debt to GDP ratio is again on a rising path. This has to raise serious questions about the long-run sustainability of Italy’s public finances, especially if one considers that markets are unlikely to remain forever forbearing in the way they price Italy’s public debt.Yup, Italy is a basket case. Does anyone have any idea of much of this drivel should be taken seriously? The article is a series of statements, not a connected argument, so it's not clear that even the author is taking it seriously.
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Euro Doomed! Euro Doomed! | 23 comments (23 topical, 0 editorial, 0 hidden)
Euro Doomed! Euro Doomed! | 23 comments (23 topical, 0 editorial, 0 hidden)
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