If the EU doesn’t resolve its economic and competitive problems, the euro will split writes Nouriel Roubini in Financial Times.
Summary: Successful monetary unions have been driven by political and fiscal union, which has stalled in the Eurozone. It was held together by convergence of low real interest rates that were driving growth and possible reform but that has gone too. Weaker countries may have to leave the euro, re-adopt national currencies and bring about a real depreciation despite huge trade losses for the region. Debt restructuring is inevitable but insufficient, and the benefits of leaving the eurozone will outweigh the benefits of staying in.
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