Deconstructing the Euro

The eurozone’s current travails stem from the fact that the euro’s exchange rate does not align with member countries' economic positions – a problem that cannot be resolved within the currency union. The only way to restore balance to Europe is to pursue a controlled segmentation of the eurozone, led by Germany and France.

PARIS – In January, Chris Williamson, Chief Economist at the economics research firm Markit, called France “the new sick man of Europe.” With near-zero GDP growth, rising unemployment, and mounting public debt – not to mention counter-productive austerity policies – it is difficult to argue otherwise. Given France’s profound importance to Europe’s economic and political stability, this poses a major threat to the entire European project.

Recent developments confirm Williamson’s diagnosis. French business activity sank to a seven-month low in December. While tax revenues increased by €32 billion ($44 billion) last year, the government deficit fell by a mere €8 billion and public debt increased from 89% of GDP to more than 93%. Meanwhile, unemployment rose from 9.5% to 10.5%.

The obvious conclusion is that austerity is not the answer. Indeed, France must abandon its current policies, for its own – and the rest of Europe’s – sake.

To continue reading, please log in or enter your email address.

Registration is quick and easy and requires only your email address. If you already have an account with us, please log in. Or subscribe now for unlimited access.

required

Log in

http://prosyn.org/tslAfdp;