Cleaning up the Euromess
Paul Krugman on Europe’s financial crisis
…the real story behind the euromess lies not in the profligacy of politicians but in the arrogance of elites – specifically, the policy elites who pushed Europe into adopting a single currency well before the continent was ready for such an experiment.
A point of view with which we can sympathise, He then goes on to draw the sadly obvious conclusion:
Now what? A breakup of the euro is very nearly unthinkable, as a sheer matter of practicality. As Berkeley’s Barry Eichengreen puts it, an attempt to reintroduce a national currency would trigger “the mother of all financial crises.” So the only way out is forward: to make the euro work, Europe needs to move much further toward political union, so that European nations start to function more like American states.
And that, we are afraid, is a point of view with which the ‘policy elites’ who created the conditions for the crisis in the first place will all too readily agree.
Krugman add the rider that further political union is ‘not going to happen anytime soon’. We are not as sanguine. If history is any guide, the European ‘policy elites’ will definitely give it a try.
