If you haven’t had a chance to read it yet, take some time this weekend reading Matthew Boesler’s interview with Bernd Lucke, the German professor who is is leading an insurgent movement called Alternative für Deutschland (Alternative For Germany) which advocates an end to the Eurozone.
A key part of Lucke’s argument is that the euro must be sacrificed to save the greater European project (the European Union), as the status quo is tearing apart the continent.
This line from Lucke is critical:
We think that the euro currently splits the European Union into two parts – a segment of an economically unsuccessful southern part, and a more northern, or more central, European part, which currently seems to benefit from the misery of the southern European countries, because all of the capital flows back from southern Europe to Germany, and the Netherlands, and other stable countries, where it helps us to do cheap investment, but which is at the expense of those southern European countries, and which certainly is the cause for envious sentiment and angry sentiment in the southern European countries, so that the political tensions within the European Union actually rise.
It’s hard to disagree with much that Lucke has to say.
As Paul Krugman observed this week, the European economic crisis now represents a bigger disaster than the Great Depression in terms of the trajectory of GDP per capita.
The Great Depression ended as country’s took themselves off of the gold standard. The European crisis may only end when countries take themselves off of the modern equivalent, the inflexible currency.
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