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 "the euro is the currency of the core. That's not in doubt."

 

     I find that a rather amazing statement to assert under the circumstances.  It seems to suggest that there isn't and simply cannot be any conceivable higher priority than that of maintaining the Euro.  It seems that we are now very close to the stage at which desperate people resort to ritual chanting in hopes of warding off some dreaded evil.

    I wish economists were required to study history, psychology, sociology and anthropology in addition to advanced calculus and quantitative analysis.  Then they might have a prayer of recognizing something very much at the heart of our current dilemma is simply the fact that very, very, important high officials made terribly mistaken decisions about the way in which the Euro currency could and should be instituted--i.e. without the necessary prerequisite authorities and operating issues resolved sensibly.   And, further, the study of these humanities would help economists recognize that now, these same very, very important high officials are before the stubborn facts of their errors and they want to do, to try, anything, no matter how dangerous or delusional, rather than face and admit their blunders--which, after all, had been very clearly pointed out to them well before they went ahead.

   At some point, don't even the highest world banking decision-makers, even European ones, and even with all their tremendous prestige at stake--don't they at some point have to admit that there just may be higher human priorities than the maintenance of the Euro currency at all costs?

     With everything else that this is, it's now also a deeply serious moral issue, the sort of issue which is at the heart of the humanities as disciplines.  Economics and economists must recover some of that before much greater harms are done out a blind and fear-driven denial which hopes to save very, very important faces.

"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Wed Jun 1st, 2011 at 01:26:53 PM EST
[ Parent ]

It seems to suggest that there isn't and simply cannot be any conceivable higher priority than that of maintaining the Euro.

It's not a priority, it's a reality. Germany will continue to have a currency, and that currency will continue to behave as the euro does, and be governed like the DM and the euro have been for the past 60 years - by inflation hawks (or gold bugs, if you prefer). Various countries nearby will continue to use the same currency. France will likely stick around.

That's a reality - that currency (with or without France, euro or new-DM) will exist. Its not a priority, or a statement of desires or wishes, it's a fact.

That such a fact is incompatible with the EU as it currently is built is a possibility, hich means that the EU cannot continue as it is built.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Jun 2nd, 2011 at 08:03:25 AM EST
[ Parent ]
Burt the EU has existed for a long time with multiple currencies; after all even now it is a economic area with multiple currencies. Why should a core euro or whatever change that?
by IM on Thu Jun 2nd, 2011 at 11:35:56 AM EST
[ Parent ]
It has coexisted first with the Bretton-Woods gold standard and then with the European Exchange Rate Mechanism. Both systems were punctuated by devaluation crises, as they couldn't fail to be. The Euro is an attempt to eliminate the possibility of a devaluation without moderating the macroeconomic imbalances that lead to devaluations.

EU countries outside the Euro are still committed to stable eschange rates and a structure similar to the old ERM. It has failed, too, as Hungary and some of the Baltics have experienced devaluation crises and/or depressions. The economy of Croatia, an accession country, is breaking under the weight of the Euro exchange rate peg without access to EU markets as it remains outside the EEA but has implemented free movement of capitals and opened its market to an extent.

It's a disaster.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Thu Jun 2nd, 2011 at 11:42:52 AM EST
[ Parent ]

   So, in much the same way that a noose around one's neck would "emliminate the possibility of a devaluation" (i.e. falling down) "without moderating the macroeconomic imbalances that lead to devaluations" (while one's crutches are removed), "it works"!   The operation was a success.  Unfortunately, the patient died. and---->

   "ERM. It has failed, too, as Hungary and some of the Baltics have experienced devaluation crises and/or depressions."  ....

  ...  Your bill for the hospitalization and surgery.  Please pay in full.   The hospital management extend their condolences to the family of the deceased.

 

"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Thu Jun 2nd, 2011 at 12:00:32 PM EST
[ Parent ]

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