Is the Eurozone doomed? Nordic-style policies, according to leaders, are “critical to Europe’s existence.”
THE EUROZONE will eventually break up, but adopting “Nordic-style measures” could be critical to the continent’s recovery, according to a British economist.
The economy of the United States has already made up the ground lost during the pandemic. Meanwhile, China is already producing more than it was before the first COVID-19 epidemic. Even Britain, which is facing all of the challenges of leaving the EU while also dealing with a particularly devastating pandemic, is undergoing one of the fastest recoveries in its history.
The eurozone, on the other hand, appears to be the weakest link in the global economy once again.
According to financial journalist Matthew Lynn, it could take years for production and output to return to 2019 levels.
“Growth figures last week were disappointing,” he wrote in the Telegraph. True, the zone is expanding, but far more slowly than the rest of the world.
“In the second quarter, the zone expanded by only 2% overall.
“Italy, with 2.7 percent growth, was the best of the major economies, while Germany only managed 1.5 percent growth for the quarter, well below expectations and barely making up for the 2.1 percent drop in the first three months of the year.”
“After a 6.5 percent drop last year, the IMF forecasts the zone to increase by only 4.6 percent in 2021.
“When will it be returning to pre-pandemic production levels? No one knows for sure. It’ll take a while if things continue as they are.”
As many fear that the eurozone’s bleak prognosis may lead to its demise in the near future, British economist Bernard Connolly’s 1995 book “The Rotten Heart of Europe: the Dirty War for Europe’s Money” has resurfaced.
Mr Connolly argues in his book, published by Faber & Faber, that there are no viable solutions to the euro crisis short of a full dissolution of the eurozone.
However, he observed that “Nordic-style initiatives” could be critical to the continent’s economic survival.
“What does that indicate if there are no conceivable solutions to the euro crisis without withdrawals, potentially even catastrophic disintegration?” wrote Mr Connolly.
“There is little doubt that serial withdrawals and, a fortiori, the fragmentation of the euro area will have disastrous effects, including the emergence of a new and larger financial crisis.
“However, such a crisis is – that word again – unavoidable for some.”
“The largest credit,” he continued. “Brinkwire Summary News.”