Once unthinkable (by the liberal press), speculation regarding the EU's demise is going mainstream.
Nov. 21, 2011, 12:01 a.m. EST
The euro must be split up
Commentary: Only way to rebalance economies of North & South
By David Marsh, MarketWatch
LONDON (MarketWatch) — The world’s greatest macroeconomic imbalances are not between the U.S. and China, as many believe, but within the not-so-united states of Europe.
This is just one result of the currency and competitive distortions caused by what German Chancellor Angela Merkel calls the “common destiny” of economic and monetary union. Destabilizing European current-account imbalances will need to be eliminated, sooner or later, by splitting up the euro area into a creditor and a debtor group.
The euro creditors formed around Germany would need to accept a trade-weighted appreciation of 20%. In the export sector, this might trigger wailing and gnashing of teeth, but consumers and importers would profit greatly through a marked improvement in the terms of trade. This would be a constructive European contribution to alleviating one of the largest sources of global economic uncertainty.
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Full story: http://www.marketwatch.com/story/the-euro-must-be-split-up-2011-11-21
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