FAITH IN THE EURO August 31, 2011Posted by wmmbb in Modern History.
The Euro-zone is not doomed. Or is that just wishful thinking?
As Christian Reiermann for Spiegel Online explains:
Klaus Regling, the German CEO of the euro zone’s bailout fund, the European Financial Stability Facility, is confident that the monetary union can overcome the current crisis. He considers the euro zone to be in a better position than the US when it comes to public debt, and accuses his fellow Germans of “hysteria.”
“The currency union is not going to break apart, because strong and weak countries have a common interest in its survival.” The economic price of its failure would be too high, he says. “The chances that the euro will be abandoned by anyone, no matter who, are practically zero.”
And the article concludes:
Sometimes an optimist is nothing but a person who refuses to let themselves be discouraged by their own mistakes. Indeed, Regling believes that there is “good reason to hope that the crisis will be over in two to three years’ time.” The precondition for this, he adds, is that the euro-zone countries continue their austerity and reform plans and that the global economy doesn’t collapse.
We will have to see how the “austerity and reform plans” pan out.
At CounterPunch, Mike Whitney is not so sanguine about the prospects for the Euro and the Eurozone. My sense is that without a more developed political union, economic policy within the EU will continue to be fractious and in the longer run unsustainable.