Thursday, 28 June 2012

Death Spiral or Revival?

Some very strong positions and arguments being advanced on all sides at present over the €uro. Some want it dead, others want to save it, but either way, I suspect, the outcome takes everyone into unkown and unknowable territory at present.

On the one hand the anti-lobby claim that the austerity and rescue packages have 'undermined democracy' yet what is the alternative to the 'cure' imposed? Print money and allow the freespending of these states to continue unchecked? Somehow that doesn't appeal much to anyone. But neither does the prospect of having to cut back on the over generous handouts of taxpayer money to fund a wide range of very generous benefits the failing economies are committed to.

One thing is for sure, it can't go on like this. A solution has to be found which works for everyone. It is also clear that there has to be major reform of the manner in which economies are run right across Europe. Europe has to get its act together, and that means reining in some of the more restrictive regulations and directives piling in from Brussels for a start. Putting the brakes on the EU Commission's budget would also be a good way to signal the politicians mean business as well.

A little less negative reporting in much of the English media would also not go amiss, nor would a little less of the obviously protectionist rhetoric from the financial gurus in both the US and the UK. I can't escape the feeling that shooting down the €uro may well have unintended consequences for both currencies.

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