The Eurozone's political glue may be about to meltthen the waters in Brussels are getting very choppy indeed, he is talking about the variety of structural problems that are currently besetting the Eurozone, and the existential threat to the European Union project as a whole. It is almost as if he has had a damascene conversion and joined UKIP overnight. At least his economics seems to have done. It is all about the ability of currencies to float, pan national interest rates being damaging, the whole nine yards.
This is his summing up,
So the big question now is not whether the eurozone can avoid a wave of fiscal cum financial crises. The question is whether the union will survive. The article this week by José-Ignacio Torreblanca of the European Council of Foreign Relations in Madrid, with its complaints about German attitudes, suggests the answer might be: no.
This is a political more than an economic issue. It is possible for a currency union to survive sovereign defaults. The question is, rather, whether members believe the arrangement remains beneficial. The difficulty for surplus countries is that they must finance those in deficit, accept external adjustment or push the eurozone into external surplus. The difficulty for deficit countries is that the cost of leaving the eurozone is to face debt crises. If those have happened already, the costs will seem smaller. If they think they have replaced currency crises with credit crises, which do not even restore competitiveness and growth, they may see the union as a bad deal. Political glue could melt. Such calamities do happen. It is now up to the members to see that they do not.