Sunday, July 11, 2010

Talking head

-- The breakup of the euro area would save the 16-nation region from years of economic stagnation by boosting weaker members’ competitiveness as well as domestic demand in Germany to spark growth, Capital Economics said.
“The threatened breakup of the euro zone, which many see as a potential disaster, would actually open the door to renewed economic growth, not just for weaker members of the zone, but for Europe as a whole,” Capital Economics analysts including Roger Bootle in London said in a report released today. --
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Comment: Does this man know what he is talking about? Suggestions like that quoted by Bootle lack any substance. If Bootle woud have suggested free banking, one could take him serious - but a return to the French franc and the deutsche mark? Silly is too good a word for suggestions like that. It actually is not hard to imagine what would have happened to the euro zone's interior trade if the old currency regimes would still be with us: the disappearance of large parts of the productivity gains that result from the division of labor within a common currency area.

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