In Foreign Policy this week, Douglas Rediker of the Economic Growth Program at the New America Foundation and David Gordon of Eurasia Group explain why many of the popular views about the eurozone crisis are off the mark. Chief among these is the idea that "the euro is heading for a crack-up."
They write: "The political and economic costs of a eurozone implosion remain too high and the benefits of maintaining the common currency too real for the countries involved, as self-defeating as they appear at times, to allow a crack up. Europe will likely make steady, halting, and at times apparently counterproductive steps toward a banking union, limited fiscal federalism, and a path to political union.
To be clear: We could very well be heading for a deep crisis, and we might even see the exit of one or more member states, with Greece the most likely. But other peripherals won't see a Greek exit as a signal to leave themselves; in fact, measures taken as a consequence may well strengthen their own prospects within the currency union. The likelihood of the eurozone imploding and the reintroduction of national currencies across a broad swath of Europe thus remains exceptionally small."
Think Again: The Eurocrisis at Foreign Policy Magazine
by Douglas Rediker and David Gordon |
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