From the FINANCIAL TIMES COLUMN:
…The euro is not an end in itself. The single currency is just an instrument, aimed at promoting economic prosperity and political harmony across Europe. As the evidence mounts that it is doing the precise opposite, it is time to think not about how to save the euro – but about how to scrap it, or at least allow the weakest members to leave.
The euro has helped both to create and sustain the crisis in Europe. First, it caused interest rates to plunge in southern Europe, encouraging countries such as Italy and Greece to go on a borrowing binge. Now the single currency rules out the options that postwar Italy and others traditionally used to cope with high levels of debt: inflation and devaluation of the currency. Neither policy was cost free, but they provided an alternative to the “internal devaluation” (otherwise known as wage cuts and mass unemployment) that is currently being urged on Italy, Greece and much of southern Europe…
It is true that breaking up the euro would be fiendishly difficult and dangerous. Capital flight and debt default in countries quitting the euro could cause banks to collapse. Economic and political chaos might follow – at least for a time…
Click here to read the full article.
EDITOR: To paraphrase Shakespeare’s Lady McBeth, “Were it to be done, t’were best it were done quickly.” Whether secret talks could be held among all of the EU nations so that a surprise announcement could be made with mechanisms immediately put in place is highly doubtful. Too bad.
