In an recent op-ed article published in The Telegraph, Miguel Otero Iglesias and his co-author Erik Jones from the Johns Hopkins School of Advanced International Studies provide an original analysis of the real role of the common currency in the current economic woes of the Eurozone.
In response to the recent book by the former Bank of England governor Lord King, The End of Alchemy, they explain that the crisis of the Euro has much more to do with cross-border capital flows than lack of competitiveness. Europe’s problem is not so much the Euro, but “a mix of bad economic ideas and political bullheadedness”. In other words: “What Europe needs is not an end to the single currency, it is better economic leadership.”
While they admit that there is a good deal of “bailout anger in the north and austerity fatigue in the south of the Eurozone”, they also take into account that the Euro itself does not seem to be blamed by the populations concerned: “Polls show that 75% of Dutch, 73% of Germans, 67% of Spaniards and Portuguese and 70% of Greeks are in favour of the single currency.”
Responsible and proactive leadership in Europe would convert into action the consensus that more and better integration would be more helpful than slow and painful disintegration. The key, according to the authors “is to convince the German economic establishment to relax its insistence on austerity and take advantage of any available fiscal leeway to restart growth and investment.”
- For the entire article, please click here.
- Miguel Otero Iglesias is senior analyst at the Royal Elcano Institute in Madrid
and assiociate researcher at the EU-Asia Institute.