Clock ticks for the euro as S&P downgrades nine Eurozone economies
The bad news for the Eurozone is that S&P is still not coming out and forcing Europe to face reality: the euro is doomed
Predictable, and predicted. That’s a line that critics of the European super-state project have been using for some time now as the whole rotten edifice lurches from one crisis to another. On Black Friday the 13th, as it is being called, it was something of a two banger with nine Eurozone economies, including France, seeing their credit ratings downgraded by Standard & Poor’s, while negotiations on Greek debt went disastrously wrong in Athens. Both events were predictable, and predicted.
Much the same can be said about the reaction from Europe’s top policy makers. In full-on shoot the messenger mode the EU’s Economic affairs commissioner Olli Rehn described the S&P move as “inconsistent” since Europe was taking “decisive action” to manage its debt problems.
In one sense at least Rehn and the other mediocrities that run the European Union do have something to complain about, though it’s not the thing they think it is.
For S&P is still talking as though the crisis in Europe was about policy matters and the grit and determination of politicians.
But it isn’t about that: it’s structural. The euro is fundamentally flawed since it will always make the countries that use it relatively uncompetitive by giving them inappropriately valued currencies and/or wrongly positioned interest rates.
Every serious economist in the world can see the problem. Greece and Italy will find it much harder than they otherwise would do to get out of the mess they’re in because they’re lumbered with what is effectively a Franco-German currency. The trouble is that they haven’t got a Franco-German economy: the euro is too strong for them and that makes their economies permanently uncompetitive.
That is really what S&P should be telling the world about the Eurozone. The whole project was a reckless and irrational piece of empire building by politically motivated fanatics, and it’s doomed.
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Read more on: S&P downgrade and the end of the euro, S&P and the eurozone, Olli Rehn and the S&P downgrade, French credit rating cut, collapse of the euro, eurozone, and european union
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