Eurozone Gets Some Sanity
Responding the near-collapse of the Greek economy, forestalled only by a massive bailout from their brethren, the EU's finance ministers agreed this morning to submit the outlines of their budget plans for approval by the European Commission.
Responding the near-collapse of the Greek economy, forestalled only by a massive bailout from their brethren, the EU’s finance ministers agreed this morning to submit the outlines of their budget plans for approval by the European Commission.
As I argue in “EU Financial Supervision Framework Passed,” this was a prudent and necessary move.
Alexei Monsarrat, director of the Atlantic Council’s Global Business and Economics Program, observes that, “The Greek (and wider) debt crisis demonstrated that the Euro experiment has to move to the next phase if the currency is to survive. The implicit guarantee to the Germans that Eurozone countries would remain fiscally responsible has to be made explicit. This deeper integration will likely happen slowly, and this measure is a good first step.”
That strikes me as right. While it’s debatable whether the Euro — much less whether some of the EU’s weaker economies ought to have been included in the common currency — is a good idea, the bottom line is that those decisions were made and will be next to impossible to reverse. And a common currency without some modicum of centralized oversight to ensure that the various economies in the market don’t take actions that put everyone else’s stability at risk is madness.
Much more at the link.
Naked Capitalism has an interesting, related, take:
EU Effectively Forces Securitization Reforms on the US
http://www.nakedcapitalism.com/2010/09/eu-effectively-forces-securitization-reforms-on-the-us.html
A different set of reforms, but very interesting nonetheless. Thanks.