Predicting a eurozone break-up
by our secret columnist in Brussels
10 July 2012
An award-winning essay on the break-up of the eurozone suggests a scenario which shares some of the analysis set out here by Schadenfreude two months ago
Schadenfreude is peeved. He gets no freude from his own schaden. No joy from his own loss.
The Wolfson Economics prize offered £250,000 for the best essay on how to solve the euro crisis. The winner, Roger Bootle, proposed a northern monetary union of Germany, the Netherlands, Finland and possibly Belgium – along with Luxembourg, which for more than 80 years has been in economic union with Belgium.
Other eurozone countries should preferably not enter into a new separate monetary union since they have little interdependence. But it would be up to them.
This scheme comes some way towards the one which Schadenfreude attributed to an anonymous European Commissioner in May. His idea, which his colleagues shot down, was that Greece, Spain, Portugal and Italy should leave the eurozone because they would never meet its requirements.
This was an aiming shot – others would also have to go when their cases were fully examined. But Schadenfreude allowed the weaker brethren to have access to rescue funding, given that in the single market they are important to the big boys.
He also went further than is presently contemplated in setting the residual eurozone into a fiscal union, in which revenue is collected from the members, independently of national legislatures, and redistributed among them.
It is sometimes thought that in fiscal federalism the centre guarantees the solvency of members. Not in the United States, a political federation but with no financial bail-out provisions, except briefly after the War of Independence.
So no prizes for Schadenfreude, who must continue to toil in his vineyard.
Schadenfreude is peeved. He gets no freude from his own schaden. No joy from his own loss.
The Wolfson Economics prize offered £250,000 for the best essay on how to solve the euro crisis. The winner, Roger Bootle, proposed a northern monetary union of Germany, the Netherlands, Finland and possibly Belgium – along with Luxembourg, which for more than 80 years has been in economic union with Belgium.
Other eurozone countries should preferably not enter into a new separate monetary union since they have little interdependence. But it would be up to them.
This scheme comes some way towards the one which Schadenfreude attributed to an anonymous European Commissioner in May. His idea, which his colleagues shot down, was that Greece, Spain, Portugal and Italy should leave the eurozone because they would never meet its requirements.
This was an aiming shot – others would also have to go when their cases were fully examined. But Schadenfreude allowed the weaker brethren to have access to rescue funding, given that in the single market they are important to the big boys.
He also went further than is presently contemplated in setting the residual eurozone into a fiscal union, in which revenue is collected from the members, independently of national legislatures, and redistributed among them.
It is sometimes thought that in fiscal federalism the centre guarantees the solvency of members. Not in the United States, a political federation but with no financial bail-out provisions, except briefly after the War of Independence.
So no prizes for Schadenfreude, who must continue to toil in his vineyard.
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