As another expected Euro crisis unraveled in Cyprus, a consecutive round of critical examinations of the common currency is required. Instead of repeating the same mantras of lost independent monetary policies or severe differences in the European economies’ business cycles, another approach is needed. Perhaps the inconvenient truth and the negative unintended consequences of the common market are the fact that with one currency, fluctuations in the European Union minimum wage are inherently creating detrimental imbalances.
Posts Tagged ‘ Euro ’
The current global financial crisis has ironically produced a rather surprising and benign unintended consequence. Since financial globalization has shaped the world’s macroeconomic paradigm after the Bretton Woods system, the current status quo has come under fierce criticism. More specifically, the dollar’s “exorbitant privilege” is no longer considered to be a granted right, in particular after the recklessness of U.S economic activities prior to the financial meltdown has become evident.
The euro crisis has taken the form of a succession of national crises threatening the integrity of the monetary union. The response, each time, involves heads of European states meeting in Brussels or Berlin to agree on a rescue plan and hesitantly approving the necessary improvements in European governance. After Ireland, Portugal, Spain and Greece, does it even matter who’s next on the cliff’s edge?
The EU should be fed up with gloomy news coming from weak links in the chain, but still, there appears to be much to contend with. It seems dubious to argue that the European problem can be solved in a financial way. Structural problems need to be treated more collectively and they require more tolerance. [...]
The Greek debt crisis illustrates more than ever that the destinies of European nations are related to and dependent on one another. EU member states find themselves with little choice but to invest in Greece to keep the Union from collapsing. And with good reason, because the financial crisis goes beyond economical development and national budgets. Our way of life is at stake.
Great news: in anticipation of a more structural solution to the Eurozone’s debt problems, the euro has been rising in comparison to other world currencies for several weeks. What the, more permanent, stabilization plan will look like has not leaked out yet. Perhaps it will include some plans to fully, or at least partially, start [...]
The euro continues to be in turmoil: one by one the PI(I)GS countries are getting in greater difficulties. As dominos they are falling to the speculative attacks of investors: first Greece, now Ireland…the inevitable questions is of course: who is next? Is it Portugal, Italy (I), or – today’s favorite bet – Spain. In the meantime, the ‘strong’ and ‘sensible’ European countries are benefitting from the increasing disparities in interest.
The euro zone is facing a deep crisis. Greece and Ireland are close to bankrupt. Portugal, Spain and Italy are most likely the next victims. The call for action from the financial markets is growing ever louder. And what are our Finance ministers doing? Indeed, they are talking. A little essay on the structural deficiencies of the EMU-system.