Euro

The Euro Payoff | Adam S. Posen | IP - Global-Edition:

"In a speech at Davos, German Chancellor Angela Merkel committed her government to the survival of the euro. Neither the euro’s survival nor the German commitment to it should ever have been in question, but she took the opportunity to make a “competitiveness pact” for eurozone countries the condition for German support. Whatever policy deal emerges from the current negotiations, the intent is revealing. Germany’s leadership, as well as a large number of citizens in Germany and some neighboring countries, clearly feel that a lack of discipline on the part of the hard hit eurozone economies caused the euro crisis, and that Germany is once again sacrificing its economic interests in the service of European unity by bailing out the malingering economies. Therefore, they also believe that the economic stability of both the euro and Germany are best served by forcing the other euro economies to be as much like Germany as possible in economic policy if not in structure.

This is exactly the wrong conclusion to draw about what is at stake for Germany in the euro, and leads to a self-defeating policy approach that will not increase the euro’s long-term resilience. European monetary unification that included more than the self-proclaimed “core” countries has been to Germany’s own great economic advantage. This assessment does not depend upon appeals to enlightened political self-interest in European unity (though that is sufficient justification in itself) and is not a stalking horse for American or other countries’ interests (though a strong stable euro is to the benefit of the West as a whole). Whatever the balance of economic costs and benefits of euro adoption for other countries, for Germany itself there are many advantages to being the anchor economy for a currency zone from which it has benefited over the last dozen years. Furthermore, all of those advantages increase with the size and the diversity of the eurozone. For that reason, the best German long-term response to the euro crisis in its own self-interest is to pursue greater fiscal integration and stricter bank regulation within the eurozone, not to impose additional macro rules and austerity. [continuar a ler ....]

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