Comments on: I’m Proud to be a Europhile

By: Martin

Martin — Mon, 11 Jul 2011 10:22:19 +0000

Others, including my compatriot Bryan Gould, say they are proud to be [Keynesian] eurosceptic:

http://www.guardian.co.uk/commentisfree/2010/feb/26/keynes-greece-eurozone-policy
Proud to be a Keynesian eurosceptic
The situation in Greece and the rest of the eurozone shows I was right to oppose ceding control of macroeconomic policy …

I for one, believe Greece should follow the Argentinian path…
http://www.guardian.co.uk/business/2011/jul/10/european-debt-crisis-argentina-imf
Defaulting rescued Argentina. It could work for Athens tooStruggling under an impossible burden after its IMF bailouts, Buenos Aires knew its one hope was to stop paying its debts and become a pariah – and so it proved

Note in particular…
“It [the IMF recipe] didn’t work. In fact, drastic public spending cuts made the downturn worse, while the dollar peg prevented the devaluation that eventually helped Argentina to get back its competitiveness.”
I have long said that severe cuts are counterproductive, and Mary has also made this point as well – perhaps more articulately than myself – and the more savage cuts outside the UK have demonstrated this.

By: Mike Wood

Mike Wood — Tue, 05 Jul 2011 09:26:04 +0000

..a short post script if I may, what I think Mary-Ann Sieghart is implying (i haven’t read her piece) is that the UK has been better off outside the euro over the last three years has been that it has been able to protect its competitiveness by devaluing – which has been an important factor in the rebalancing of the economy – the second point is own own demonstrable ability to manage our economy directly, one of the reasons we continue to enjoy market confidence.

By: Mike Wood

Mike Wood — Tue, 05 Jul 2011 09:20:19 +0000

The central problem with the euro is that it is unsustainable. The successive attempts to shore it up by imposing loans coupled with austerity are merely postponing the inevitable – Greece is actually insolvent and there is precious little growth in Ireland, Portugal. The only way that these peripheral countries are going to get back their competiveness is to devalue – a tremendously difficult process (and probably not sufficient on its own in the case of Greece).

The only viable future for the Euro is greater political integration within Europe so that multiple fiscal strategies are replaced with one .Germany Austria and the Netherlands, rather than berating their southern neighbours, should undergo some fiscal expansion and be prepared to participate in an exchange union. But this is politically unacceptable. Europe must either be more integrated (coupled with substantial and democratically supported changes ) or fall back to a series of currency unions so that basic macroeconomic policy options become available. The status quo is not an option.

The problem with the Euro is fundamentally political Europe is partly in a mess because all of you so-called europhiles seem unable to grasp or certainly to articulate what an integrated Europe might mean – where is your vision ??