The author makes variation in competitiveness out to be a bigger problem than it actually is. Even if one nation is always less competitive than the other (and I am not sure that Spain and Germany would be a good example here), this doesn't have to end up in a situation where one nation can produce a product for less and less and the other nation stagnates indefinitely.
> It’s pretty obvious that Merkel, or maybe her voters, aren’t European enough to accept the fact that Greece will never be able to repay it’s debt, no matter how much they cut their spending.
Most German voters are very capable of accepting this. They think reforms are necessary to prevent the problem from reoccurring, but they don't oppose a haircut per se.
> Far-outish-upon-Grandalf with 1000 inhabitants and a closed factory in the North of England just isn’t a good business for England. But the government still pays for social services, public pensions, roads and schools because the British voters accept that even though far-outish-upon-Grandalf is pretty screwed up, they are after all British and you can’t just throw the poor bastards out of the Commonwealth.
> Carolina is a piss-poor state that needs handouts from the federal government year after year. Last year South Carolina spent $2.34 for every $1 they collected in taxes. Courtesy of the federal government.
EU nations aren't like states in the US. It will be great if some time they become states in a union, but that time is not now. While they're still independent, though, each nation remains able to plan their budget and expenses independently. Sure, there is not much freedom to adjust the currency -- but each nation still has plenty of other tools available to make sure the deficit remains controllable.
I disagree with the notion that the Euro has to fail just because EU nations are not all the exactly the same. I see this crisis as a point where people finally start paying attention to their neighbors in the fiscal union around the Euro, and that should make future crises much less likely and should make the EU more resilient as a whole.
> It’s pretty obvious that Merkel, or maybe her voters, aren’t European enough to accept the fact that Greece will never be able to repay it’s debt, no matter how much they cut their spending.
Most German voters are very capable of accepting this. They think reforms are necessary to prevent the problem from reoccurring, but they don't oppose a haircut per se.
> Far-outish-upon-Grandalf with 1000 inhabitants and a closed factory in the North of England just isn’t a good business for England. But the government still pays for social services, public pensions, roads and schools because the British voters accept that even though far-outish-upon-Grandalf is pretty screwed up, they are after all British and you can’t just throw the poor bastards out of the Commonwealth.
> Carolina is a piss-poor state that needs handouts from the federal government year after year. Last year South Carolina spent $2.34 for every $1 they collected in taxes. Courtesy of the federal government.
EU nations aren't like states in the US. It will be great if some time they become states in a union, but that time is not now. While they're still independent, though, each nation remains able to plan their budget and expenses independently. Sure, there is not much freedom to adjust the currency -- but each nation still has plenty of other tools available to make sure the deficit remains controllable.
I disagree with the notion that the Euro has to fail just because EU nations are not all the exactly the same. I see this crisis as a point where people finally start paying attention to their neighbors in the fiscal union around the Euro, and that should make future crises much less likely and should make the EU more resilient as a whole.