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FT.com / Brussels - Issing warns debt crisis threatens euro
Mr Issing, writing after last year's international financial rescue operations for Greece and Ireland, which amounted to almost €200bn, said: "The present seemingly unstoppable process towards further financial transfers will generate tensions of an economic and especially political kind. The longer this process is characterised by unsound conduct of individual member countries, the more these tensions will endanger the existence of Emu.


Mr Issing, 74, served for eight years as the ECB's chief economist, from 1998 - the year before the euro's birth - to 2006. He remains one of Germany's most respected economists, ensuring that his views on the euro carry weight with German policymakers and public opinion.


While he cautioned against simplistic predictions that "doomsday is inevitably approaching", Mr Issing said proposals that Emu should be expanded into a "transfer union" - the transfer of funds from Germany and other financially strong states to weaker, highly indebted states - were wrong.

"This would wholly change Emu's character," he said.

Is Issing answering kcurie's question for us?

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Jan 12th, 2011 at 11:22:33 AM EST
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Evil crystal clear... or just pure egoism?

In any case, this sets Germany from 5 to 10.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Wed Jan 12th, 2011 at 11:34:23 AM EST
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