Niall Ferguson spoke to Bloomberg Television this morning about the deteriorating situation in the eurozone. He points to the current infighting between the ECB’s leadership, and the rest of the eurozone, as creating an environment where the region’s problems can’t get solved.
- 0:50 View confirmed that the eurozone is a government killing machine, that the bailouts and austerity measures are forcing governments out.
- 1:50 One precedent in the 19th century – Latin monetary union, ended by Italian deficits.
- 2:20 Political opportunists will take hold, more True Finn type parties in north, in the periphery, more parties who want to leave. Leaving the eurozone is going to start surfacing as a politically credible idea, and it’s the most dangerous one.
- 3:30 It’s important the IMF has a heavy hitting European leader, but there’s no reason to think this will create a solution to the crisis. Jean-Claude Trichet at the ECB is making it tough to get a restructuring through. Europeans can’t agree on how to sort out Greece. If the ECB is against this, it doesn’t matter what the IMF does. Stakes are much higher than politicians think. The possibility of getting an orderly solution is getting lower and lower.
- 7:00 The problems in Greece are not that big, but what we’re dealing with is a collapse in political will.