Wednesday, 17 August 2016

A split euro is the solution for Europe’s single currency - FT.com

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It was almost inevitable that taking away two key adjustment mechanisms, the interest and exchange rates, without putting anything else in their place, would make macro adjustment difficult.

From A split euro is the solution for Europe’s single currency - FT.com

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It is important that there can be a smooth transition out of the euro, with an amicable divorce, possibly moving to a “flexible-euro” system, with say a strong Northern Euro and softer southern euro

From A split euro is the solution for Europe’s single currency - FT.com

Who am I to argue with a Nobel prize-winning economist and former chief economist of the World Bank? So let’s take it as read that he right about this. I say let’s do: create the Northern Euro (the Anglo) and the Southern Euro (the Latino) as hard e-currencies. There’s no need to ever bother minting coins or printing banknotes.

But one thing that immediately springs to mind is: why stop there? Stieglitz talks about the digital economy enabled by modern technology, about “electronic trade tokens”. 

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