Home > Uncategorized > More on the eurozone. Is this worse than we think?

More on the eurozone. Is this worse than we think?

The well known and high profile economist Joseph Stiglitz certainly thinks so

“There is a risk of a depression lasting years, leaving even Japan’s Lost Decade in the shade. The eurozone economy is 20pc below its trend growth rate,” he said.

And this from Professor Christopher Sims

“If I were advising Greece, Portugal or even Spain, I would tell them to prepare contingency plans to leave the euro. There is no point being in EMU if all that happens when you are hit with a shock is that the shock gets worse,” he said.
“It would be very costly to leave the euro, a form of default, but staying in the euro is also very costly for these countries. The Europeans have created a system that is worse than the Gold Standard. Countries are in the same position as Latin American states that borrowed in dollars,” he said.

Ok. These are opinions of economists but perhaps this relatively underreported quote is more significant? From Angela Merkel

German Chancellor Angela Merkel told the forum that it was hard to manage a currency for 18 states, when sovereign parliaments refuse to follow polices agreed by the EU institutions. Yet she insisted that the crisis countries had slashed current account deficits and the “first fruits” of durable recovery are in sight.

Maybe its me but isn’t there a sense of resignation in that quote? Of course she’s going to qualify the statement and rightly so given the possible effect on the currency but i detect a sense of ‘we would be better off out of it’

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