2008-2012 was, apparently, not enough for the Great and G...

2008-2012 was, apparently, not enough for the Great and Good of Germany to decide to repair the Eurozone and European Union's structural economic flaws: Wolfgang M��nchau: Eurozone Downturn and Lack of Reform Presage Existential Crisis: "A slowdown mixed with a monetary union unwilling to repair itself would be a risk to the global economy...

...Germany has closed the doors on serious reform. Angela Merkel and Emmanuel Macron���s meeting in Berlin exposed deep differences about the German and French leaders��� visions of the future.... [And] there has been a sudden decline in the eurozone���s economic activity.... Add these two pieces of news together. We know for certain that Germany will not agree to a central eurozone budget to weather macroeconomic shocks. There will be no single safe asset. There will be no common deposit insurance. The big project of a European banking union will remain forever uncompleted. Then add something really dangerous���a recession���into the mix. I have no idea whether the next crisis will originate in sovereign bond markets, in the banking sector, or somewhere else. But the combination of a slowing and possibly retracting economy and a monetary union unwilling to repair itself constitutes one of the biggest risks to the global economy right now....

After years of following the eurozone debate, I have come to the conclusion that Germany will not agree to reforms unless it is confronted with a take-it-or-leave-it choice. A eurozone break-up would be a disaster for Germany. It would destroy the country���s export-led business model, and shrink its massive stock of external assets. But it is the prevailing assumption behind the refusal to accept institutional reforms that such a challenge would never happen. This assumption is correct. For now...

#shouldread
#macroeconomics
#exchangerates
#eurozone