A Trip Down Euromemory Lane – Paul Krugman – NYTimes.com

Paul Krugman, Laureate of the Sveriges Riksban...

Paul Krugman, Laureate of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008 at a press conference at the Royal Swedish Academy of Sciences in Stockholm (Photo credit: Wikipedia)

Outside the Berlaymont building of the Europea...

Outside the Berlaymont building of the European Commission (Photo credit: Wikipedia)

This is a must-read, short article, from liberal, Nobel prize-winning, economist,  Paul Krugman, writing in his NYT blog. Check it out!

via A Trip Down Euromemory Lane – NYTimes.com.

The article simply quotes two former important European policy-makers. The impact is truly stunning.

On the positive side, I believe that the current teams at the European Commission and the European Central Bank truly understand the magnitude of the risks and how to effectively mitigate. Unfortunately, the politicians and Germany’s Constitutional Court may become roadblocks.

As has been highlighted many times on this blog, the political leaders are light on strategy and strong on political quick fixes.

Unless Europe follows a radical strategy, the Euro must be dismantled, causing uncharted levels of economic, social and political pain.


One response

  1. Dr Alf poses a conundrum.

    On balance, and by any objective measure, the EU and the Euro are respectively a failed organisation and a failed and failing currency out of which the Greeks will have to be ejected and following them some of the other PIIG countries like Portugal which are hopelessly un-competitive.

    Within Europe, Germany is successful; Finland, Sweden and Denmark are reasonably well-run and the UK is not realizing its export and business potential.

    Europe is carrying too many old and unproductive people, and has within it a demographic time-bomb, in the form of a fast growing Muslim population containing radicalized elements who need to be rooted out as a matter of extreme urgency.

    Europe outside of Germany, needs to make and sell things that people want outside of its own borders and has to become competitive with South Korea, China and the new MINT countries other than Nigeria which will soon become a failed state.

    QE will at best be a temporary fix but in the end Europe has to earn its way out of trouble not spout a lot of hot air.

    My own assessment is that the experiment will fail and that Europe will break-up into individual nation states because the straight-jacket of German control under today’s version of Bismark, the “Iron Chancellor”, Angela Merkel is too tight for countries like the UK, which are culturally unable to adjust to the idea that after two World Wars, Germany is in what the Australians like to call the “box seat”.

    The 3 million jobs which UK citizens do in Western Europe would be done anyway, so they are not dependent on EU membership as some people think.

    In terms of foreign policy, Europe is in thrall to the Americans and is still in denial over ISIS with whom we are now at war.

    Financial engineering, sleight of hand and “dressing up ” balance sheets have their place, as Dr Alf in his earlier incarnation knows.

    This is not one of those times.

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