Tuesday, July 08, 2014

How the Eurozone is quietly making the Euro doom merchants eat their words.

The remarkable thing about the Eurozone is how little dissent there is now about the process of stabilisation of the single currency. Roll back a couple of years and the doom merchants were in full flight. Greece would have to leave. Portugal would surely follow. The Euro was dead. And so on. In fact progress has been steady under the skilled management of the EU and, especially, Angela Merkel. The Euro, far from being dead, is attracting new nations to it. The process of greater macroeconomic coordination of Eurozone countries (always a likely requirement) is moving forward without too much bleating about lost sovereignty. Meanwhile Britain stands aloof from all this, failing to use its currency independence to boost the balance of trade (the reverse in fact as we let the pound strengthen so making our exports more expensive). 

Yes there is much still to do and a continued credit squeeze is regrettable. But come the dawn the Euro will surely emerge strong, as will the finances of the countries that use it. The most successful economic union of all time will be underpinned by a currency that will almost certainly replace the dollar as the transnational currency of choice. By then Britain will probably have reverted to Pounds, Shillings and Pence!


Post a Comment

Subscribe to Post Comments [Atom]

<< Home