Wednesday, February 3, 2010

Yet more on the Forbes column

I wanted to write about a couple of general lessons from the Greek mess, only to find that RGE's Mary Stokes has made the very same points I was intending to make in an email response to my Forbes inaugural column. Therefore, I am quoting her, with her permission of course:
It seems to me that the eurozone is a weird middle ground...a point of disequilibrium. The EMU countries have a one-size-fits-all monetary policy, but they each have their own fiscal policies and the checks and balances (eg. the EU deficit procedure - something I see as akin to a weak fiscal rule) lacks teeth. So the two options in the long-run would seem to be...move forward on integration - specifically greater fiscal integration - as quickly as possible or go their separate ways.

On a separate note, I'm reading stuff on Estonia's euro adoption goal of 2011. Many believe Estonia's problems will be all in the past once the country gets in the euro zone. I personally would be quite surprised if the ECB gives its blessing on further eurozone enlargement (particularly when Estonia is likely to barely make the budget deficit criteria) when Greek is in the throes of fiscal woes that highlight the vulnerabilities of the euro zone. We shall see....
I am giving a speech on lessons from the crisis (not the Greek one, the 2007-??? one, i.e. the big picture) and these two will certainly make it to my grocery list...

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