Posted by: Dirk | September 26, 2013

The Economists’ Warning

After three weeks in China I’m back in Berlin. The contrast between the dynamic Chinese economy and the lackluster European economy is quite stark. The problem, as I understand it, is the European currency, the euro. Its flaws have been revealed, but nothing has been done to address its shortcomings. I have just signed “The Economists’ Warning“, of which I reproduce the last paragraph below.

It is essential to realise that if the European authorities continue with policies of austerity and rely on structural reforms alone to restore balance, the fate of the euro will be sealed. The experience of the single currency will come to an end with repercussions on the continued existence of the European single market. In the absence of conditions for a reform of the financial system and a monetary and fiscal policy making it possible to develop a plan to revitalise public and private investment, counter the inequalities of income and between areas, and increase employment in the peripheral countries of the Union, the political decision makers will be left with nothing other than a crucial choice of alternative ways out of the euro.

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