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Should Britain now join the euro – MoneyWeek

10月 18, 2020 by     No Comments    Posted under: 狗万下载足彩吧

We’rebetteroffout,saystheFT’sMartinWolf。

Granted,entryseemsplausibleatcurrentexchangeratesandrealinterestrateshavebeenhigherheresince1999。

Butsettingourownratesallowedustorestrainthecreditbubbleabit;theeurozone’slowerrateswouldhaveledtoanevenbiggerboomandinflationandcredit“overshoot”。

Withthespendingboomover,atleastthefallingpoundcancushiontheblow。

Eurozonestatesinthesametroubledon’thavethisoption。

Moreover,consumerpricesbetween1998and2008roseby18%here,thesameasinGermanyandlessthanFrance’s20%,whileGDPin1999-2008hasgrownby28%,against21%intheeurozone。

“Remainingoutside…preservesthesafetyvalveofcurrencyflexibility,whilelosingnothingineconomicperformance。



Inanycase,theeurozoneisheadingforturbulence。

Growthisontheslide,creditconditionsarebeginningtotightenandeconomicsentimenthitanearthree-yearlowinApril。

AndunemploymenthasnowtickedupinGermany,bodingillforalreadyfragileconsumerconfidence–whichinFrancehashita20-yearlow。

Themainproblem,however,isthedivergencebetweentheperipheryandthecore。

Portugal,Spain,GreeceandItalyhavebecomeincreasinglyuncompetitiveoverthepastfewyearsduetothestrengtheningeuro,rackinguplargecurrentaccountdeficits(around9%-10%lastyearintheformerthreecountries)thathavedraggeddownthezone’stradeperformance。

Theeurozonehadaseasonallyadjustedrecordcurrent-accountdeficitofe15。

3bninMarch。

InSpain,IrelandandGreeceshrinkingcompetitivenesshasbeenmaskedbyspendingspreesinducedbyhousingbubbles:pricesrosethreefoldinSpainbetween1997and2007。

Butnowthesehaveburst,withSpanishpricesdown15%sinceSeptember,andbothcountrieslooksetforanastyslowdown。

WithnocontrolofinterestratesandthehawkishECBunlikelytocutratessoon,andwithouttheoptionofdevaluingtheircurrencies,onlycuttingwagecoststoimprovecompetitivenesscanhelptheperipheryinthemediumterm。

ThatmeansfollowinginGermany’sfootstepsbyclampingdownonlabourcosts–realGermanunitwagecostshavestayedsteadyforadecade。

Butthatalsoimpliesasevereslowdown:Germanyonlygrewbyanaverageof0。

6%in2001-20005,saysWolf。

“Astheboom-bustcycleturnsugly”thelikelyupshotis“alotmoreirasciblefinanceministers”intheeurozone,asWolfgangMunchauputsitintheFT。

PoliticalpressureontheECBtowaterdownitsinflationtargetsanddashforgrowthmaymount,dentingitscredibilityandthecurrency。

Thepressureofadjustingtointernaldivergencesmayprovetoomuchforsome。

“Itisnocoincidence,”asBNPParibaspointedoutearlierthisyear,“thatallfailedcurrencyunionswereabandonedduringtimesofeconomicstress。



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