Saturday, May 22, 2010

Werner on the Euro crisis

In the UK we seem to be smugly complacent that whatever trouble the Euro is in at least we are not in it and not likely to be.  But a crisis may well be what some people want in  order to achieve EU political union.  Given a Euro collapse and such a move would there be pressure on the UK and other semi-detached members to cave in to an offer 'we couldn't refuse' and scrap the national currency?  In a recent article, Richard Werner -International Banking professor- says a 'United States of Europe' is one possibility and another is that Greece will get kicked out of the Euro. His article is a must for its insight into what is happening now, and about his warnings over many years on the danger to sovereign states if they give up their power to run their own currencies - like Greece did.

He fingers the central bank (ECB) which through its credit creation policies towards Greece and others created an unsustainable economic boom that led to this present mess. Werner says Greece cannot be solely blamed for its current position. Link to the Daily Yomuiri article.

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