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European Tribune - The "Euro Crisis" - Both more and less than meets the eye
The €-zone as a whole has no structural economic problem that it is not fully within the collective power of its members to solve.
Specificall, the Eurozone as a whole has balanced trade, its currency is a globally-hard fiat currency, and it has a negligible amount of foreign-denominated debt.

The EU as a whole is a different beast - peripheral countries outside the Euro have to manage an exposure to the Euro, much like dollarised economies in Latin America, while being hamstrung by the single market rules and in most cases a commitment to the toxic Maastricht Convergence Criteria in order to join the Euro on a short schedule. This is not impossible to manage, but when mismanaged it can blow up spectacularly, as in Argentina or in the Baltic states.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Migeru (migeru at eurotrib dot com) on Thu Nov 18th, 2010 at 05:59:55 AM EST
But even more than balanced foreign trade, which is important, Europe still has world-class infrastructure, reasonable educational attainment, a lot of industrial plant left despite the best efforts of thirty years of Thatcherism and probably the least unsustainable energy mix of any industrialised region on the planet.

Quite simply, except direct control of raw materials, all the economic fundamentals range, for the European Union considered as a whole, from adequate to excellent. The crisis simply can't be the result of structural problems that aren't actually there - so it must be a political crisis.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 18th, 2010 at 07:19:26 AM EST
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