The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
First, the collapse of the Bretton Woods system of fixed exchange rates pegged to the US Dollar, and by proxy gold, presented the threat of competitive devaluation for intra-European trade. The experience of the 1930s, in which countries attempted to decrease the cost of their products in foreign markets through currency devaluations, haunted the policymakers of that time. Thus you get an attempt to restore a system of fixed exchange for intra-European trade after the loss of a global system provided as a public good by the US government.
Where there is no trust, how can you have a monetary union, let alone a political union? There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
- Jake Friends come and go. Enemies accumulate.
Eventually one of the principal participants would bow out, the other would set whatever discount it wanted relative to the rate at which the former stopped defending its discount. You would have discovered the exchange rate which neither central bank could feasibly attack (and since the central banks, collectively, have greater pricing power than any speculator, by inference also from speculative attack).
Which suggest that perhaps Germany stepping outside the Euro causes less risk of an outbreak of competitive devaluation than forcing the peripheral countries out one by one. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by Frank Schnittger - Feb 2 2 comments
by Frank Schnittger - Jan 26 3 comments
by Frank Schnittger - Jan 31 3 comments
by Frank Schnittger - Jan 22 3 comments
by Cat - Jan 25 61 comments
by Oui - Jan 9 21 comments
by Frank Schnittger - Jan 13 28 comments
by gmoke - Jan 20
by Oui - Feb 4
by Oui - Feb 311 comments
by Frank Schnittger - Feb 22 comments
by Oui - Feb 250 comments
by Oui - Feb 16 comments
by Frank Schnittger - Jan 313 comments
by gmoke - Jan 29
by Oui - Jan 2732 comments
by Frank Schnittger - Jan 263 comments
by Cat - Jan 2561 comments
by Frank Schnittger - Jan 223 comments
by Oui - Jan 2110 comments
by Oui - Jan 21
by Oui - Jan 20
by Oui - Jan 1841 comments
by Oui - Jan 1591 comments
by Oui - Jan 145 comments
by Frank Schnittger - Jan 1328 comments
by Oui - Jan 1221 comments