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So I think we should lay out the scenario explicitly, and see what our attitudes towards it are.

To me, Italy is a clear target for this anti-Euro talk. Because Italy's economy has been hit particularly hard by the German Euro, and alone among the major Euro economies, there is a major political party which has made a lot of hay on the Euro issue, which may well be in government soon.

So what is the Trump plan, insofar as there is one? Drive a wedge, sure. Encourage Italy to leave the Euro? What can they offer as enticement? From a trade point of view, what they want is for the EU to disintegrate, so that they can make leonine treaties with each member state. Getting Italy out of the EU seems a long shot. But driving the Euro up against the dollar, by picking off the weaker economies, is a probable Trump goal.

As we all know, re-balancing the euro area through fiscal transfers would fix the problem, and the frictions. This requires a change of government in Germany, but would a Schulz government be any better?

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Sun Feb 5th, 2017 at 07:13:55 PM EST
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