Posted by: David | 2, December 2007

Is the Euro doomed?

An interesting article caught my eye in the Telegraph, Credit crunch could crush the Euro. I’ve seen the argument before; the Eurozone economy isn’t held together by a strong political union and federal tax system, nor is it economically integrated as it differs from stronger economies like Germany to slower, debt filled, inflationary states like Italy. It gets caught in an interest rate jam – cut rates for growth or hike them to slow inflation – and this structural flaw causes the whole thing to break up, like every previous currency union.

The real test will be the first downturn, and I’m so glad we kept the Pound.


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