Monday, October 06, 2008

An interesting time to live in "Europe", I guess...

From Open Europe:
Wolfgang Munchau takes a similar line in the FT, arguing that "A systemic banking crisis is one of those few conceivable shocks with the potential to destroy Europe's monetary union."

Guardian Economics Editor Larry Elliot argues that the "Contagion could fracture the eurozone". He writes that, "The week's events have challenged the smug notion that the credit crunch is a purely Anglo-Saxon affair. A glance around Europe shows this is far from the truth: from Iceland to Greece, there are signs of acute stress accentuated by the same marked slowdown as in the UK... In the long term, monetary unions do not survive without political union, and so the...conclusion is that there are pressures both for closer integration and for disintegration. The crisis could strengthen those who argue that the halfway house is inherently unstable and will remain so until there is fiscal as well as monetary union. On the other hand, the growing threat of recession may make some countries question the value of remaining in a monetary union."

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