6 things the leaders of the single currency should apologise for

Posted in Blog, Politics

The single currency is now doing visible damage, not just to some Euro area countries, but also to the wider global economy.

 The leaders of the single currency should say sorry for:

1  setting up a single currency long before they had brought their various economies into line. 

2  letting members of the zone borrow much larger sums than the rules allowed, imposing no discipline on debt addicted governments.

3 thinking that much poorer countries than their own would get out the cheque book and pay for their excess spending, through the IMF and by direct loans from China and elsewhere.

4 running a monetary policy which created large property bubbles in countries like Ireland and Spain, weakening the banking systrem.

 5 failing to demand sufficient cash and capital in the banks, and for publishing favourable stress tests which turned out to be wrong. 

 6 pretending they have a 1 trillion Euro fund to fix it, when all they have is a Luxembourg company with the right to borrow money on behalf of Euro governments.

I am indebted to UK politician John Redwood for these ideas.