Feb 10, 2023·edited Feb 10, 2023Liked by Philoinvestor
Great take, very comprehensive! Thank you!
I still believe all will be fine and better to have EUR, EU/EZ ... the cost of not having is greater than the alternative, not that it is perfect or so :).
Very well written essay. The Euro-Zone is a debacle of epic proportions. A common currency is to strong for economically weak countries and to weak for economically strong countries. Nothing will ever change that. The ECB is just trying to keep the Euro-Zone alive by printing an endless amount of money and that will ultimately end in a massive inflation (as we are seeing right now). The failure of the Euro is not a question of "if", but a question of "when".
I enjoyed the essay as a concise breezing through the last 15 years or so. A couple of points, if I may:
1) Geopolitical ambivalence is a permanent feature (could be a bug, but not necessarily). When ex-Yugoslavian countries went at each other's throats in the 90s, some thought that EU's hammer-time had come. What followed was an embarrassing dividing and bickering, till NATO entered the scene. Yet the EU continued, expanded and actually deepened.
2) You mention, but somewhat downplay, the institutional - not exactly "imagination" - let's say "inclination" of the EU bodies to "charge to the void" when the shit hits the fan. ESM was an ex-nihilo quasi-fiscal authority, formed at the outset of the Greek saga (first as EFSF). Then, as you correctly note, the ECB, a traditional, treaty-assured inflation fighter went "whatever it takes", and did so only with the steady backing of the European Court of Justice (even at the face of the German Constitutional Guardian in 2019-2020). Covid-19 brought forth new fiscal-like tools (NGEU).
So tensions yes, even rifts, but also ever-expanding institutional "glue". Now if the citizens' European convictions indeed strengthen, or not, that is the question - I think.
Regarding monetary disintegration history, I still find this UBS piece top-notch: A brief history of break-ups (Deo et al, 11 Oct 2011).
Great take, very comprehensive! Thank you!
I still believe all will be fine and better to have EUR, EU/EZ ... the cost of not having is greater than the alternative, not that it is perfect or so :).
Have a great weekend!
Mav
Very well written essay. The Euro-Zone is a debacle of epic proportions. A common currency is to strong for economically weak countries and to weak for economically strong countries. Nothing will ever change that. The ECB is just trying to keep the Euro-Zone alive by printing an endless amount of money and that will ultimately end in a massive inflation (as we are seeing right now). The failure of the Euro is not a question of "if", but a question of "when".
Seems to me that demographic collapse will eventually lead to this issue coming to a head.
May be measured in decades, but I doubt the EU as it stands today outlives me.
Hey Philo,
I enjoyed the essay as a concise breezing through the last 15 years or so. A couple of points, if I may:
1) Geopolitical ambivalence is a permanent feature (could be a bug, but not necessarily). When ex-Yugoslavian countries went at each other's throats in the 90s, some thought that EU's hammer-time had come. What followed was an embarrassing dividing and bickering, till NATO entered the scene. Yet the EU continued, expanded and actually deepened.
2) You mention, but somewhat downplay, the institutional - not exactly "imagination" - let's say "inclination" of the EU bodies to "charge to the void" when the shit hits the fan. ESM was an ex-nihilo quasi-fiscal authority, formed at the outset of the Greek saga (first as EFSF). Then, as you correctly note, the ECB, a traditional, treaty-assured inflation fighter went "whatever it takes", and did so only with the steady backing of the European Court of Justice (even at the face of the German Constitutional Guardian in 2019-2020). Covid-19 brought forth new fiscal-like tools (NGEU).
So tensions yes, even rifts, but also ever-expanding institutional "glue". Now if the citizens' European convictions indeed strengthen, or not, that is the question - I think.
Regarding monetary disintegration history, I still find this UBS piece top-notch: A brief history of break-ups (Deo et al, 11 Oct 2011).