Pissarides, C., (2013), “The Euro Should Be Growth Friendly or Be Dismantled”, Social Europe Journal, 16 December.
Nobel laureate Christopher Pissarides was once a passionate believer in the benefits of European monetary union. In light of the damaging effects of the Eurozone crisis, he now writes that the euro requires urgent reforms to restore its credibility. He argues that the single currency should either be dismantled in an orderly way, or the direction of economic policy should be altered substantially to promote growth and employment.
One of the most exciting things about working at the LSE is that we get to hear some of the world’s top thinkers and policy-makers. One occasion that I recall vividly is the visit of two great Europeans – Valerie Giscard d’Estaing and Helmut Schmidt. Europe had already completed the single market, the Berlin Wall had fallen and the European Union was preparing to embrace new members and adopt a single currency.
I was completely sold on the idea. In 2000, I joined the Cyprus Monetary Policy Committee to help bring the euro to my home country; and I worked on the teams in Britain and Sweden on the implications of the euro for the labour market. Back then, the euro looked like a great idea as a key step in the process of European integration. But it has now backfired: it is holding back growth and job creation; and it is dividing Europe. The present situation is untenable: we need something similar to the rallying calls of Giscard d’Estaing and Helmut Schmidt to restore the euro’s credibility in international markets. We need charismatic European leaders who will restore the trust that Europe’s nations once had in each other. Regretfully, I do not see either materialising.
The euro should either be dismantled in an orderly way or the leading members should do what’s necessary as fast as possible to make it growth and employment friendly. We will get nowhere plodding along with the current line of ad hoc decision-making and inconsistent debt-relief policies. (Compare, for example, Cyprus and Greece, where the source of problem was similar but the solution very different). The policies pursued now to steady the euro are costing Europe jobs and they are creating a lost generation of educated young people. This is not what the founding fathers promised.
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Σχετικές Αναρτήσεις
- Stiglitz, J., (2013), “An Agenda to Save the Euro”, Project Syndicate, 04 December.
- Crafts, N., (2013), “Saving the Euro: A Pyrrhic Victory?”, Competitive Advantage in the Global Economy and Clatham House, The CAGE-Chatham House Series, No. 11, November.
- Crum, B., (2013), “Saving the Euro at the Cost of Democracy”, Journal of Common Market Studies, 51(4): 614-630.
- Bastasin, C., (2012), Saving Europe: How National Politics Nearly Destroyed the Euro, Washington: Brookings Institution Press.