This is an outstanding, must-read article published by leading think-tank Bruegel. Check it out!
The article examines the history of the Euro. Once again, it highlights that politics is subordinating economics.
After this week’s deal with Greece, I think that the Euro will once again come under intense scrutiny. Fiscal convergence seems to be for the birds. Big countries like France can flout the rules but small countries, like Cyprus, are held strictly accountable.
Perhaps, France will again try to gain momentum on less austerity and more investment? After all, it’s investment that creates jobs. Most leading economists are bitterly critical of excessive austerity as policy tool.