European Union must adjust its monetary policy based on the average overall condition of its member countries.
Creates perpetual interest rate imbalance.
Interest rates will be too low in countries where wages are rising and too high in countries where unemployment is rising.
Creates perpetual interest rate imbalance.
Interest rates will be too low in countries where wages are rising and too high in countries where unemployment is rising.
Prior to the Euro’s creation, if a country engaged in monetary recklessness (increased debt, spending) the markets would respond with higher interest rates and/or falling currency prices via exchange rates.
This controlling mechanism was removed with the creation of the Euro.
This controlling mechanism was removed with the creation of the Euro.
In practical effect, the stronger, more fiscally disciplined EU economies are not only subsidizing EU countries that choose to engage in more reckless monetary policy and actions – they essentially encourage them to do so.
The European Union is a political structure – a politically desired outcome.
It is not something driven by free markets.
Like all politically driven outcomes, the European Union is doomed to ultimate failure if it’s not concurrently supported by free markets.
It is not something driven by free markets.
Like all politically driven outcomes, the European Union is doomed to ultimate failure if it’s not concurrently supported by free markets.
