Editorial note: If you have not yet read our mission statement above, please do so in order that you can put our blogs in context.
6 July 2012
Economist Jonathan Tepper, in his submission for the Wolfson economics prize, proposes that not only Greece but Ireland, Italy, Portugal and Spain as well should default on their debts and replace the euro by a devalued national currency in order to restore competitiveness.
Which is largely what Antigone1984 has been advocating since the European sovereign debt crisis broke out some eighteen months ago.
Tepper cites no fewer than 69 countries that have exited currencies in the past century without experiencing major difficulties
Tepper is chief editor of macroeconomic research group Variant Perception and co-author of the New York Times best-seller “Endgame: The End of the Debt Supercycle”, a book on the sovereign debt crisis.
He did not, however, win the £250 000 prize awarded yesterday 5 July 2012 by Tory businessman Lord Wolfson for the best essay on the least disruptive way to organize the break-up of the eurozone.
The prize went to Roger Bootle, managing director of Capital Economics, who also recommended that Greece revert to the drachma, which he expected would then devalue rapidly. Bootle thinks that Greece is likely to leave the eurozone by the end of the year.
He may be right. It is what most economists have been predicting for since the crisis began.
With a declining economy, decreasing tax receipts and the albatross of intractable sovereign debt around its neck, Greece is currently unable to meet the economic targets contained in a savage austerity programme agreed with its creditors in exchange for two massive loans to bail it out.
However, it is significant that these predictions of a Greek exit come from economists.
Antigone1984 comes to this question with the benefit of considerable exposure to the politics, as well as the economics, of the European Union. On the basis of this insider familiarity with the political powerscape in Brussels, one thing we know for certain is that the European Union will leave no stone unturned in its struggle to prevent the 17-nation eurozone from breaking up. The creation of the eurozone at the turn of this century represented a quantum leap along the road toward the Eurocrats’ ultimate goal – the creation of a United States of Europe. They will not give in without the father and mother of a fight.
You might perhaps care to view some of our earlier posts. For instance:
1. Why? or How? That is the question (3 Jan 2012)
2. Das Vierte Reich/The Fourth Reich (6 Feb 2012)
3. The shoddiest possible goods at the highest possible prices (2 Feb 2012)
4. Where’s the beef? Ontology and tinned meat (31 Jan 2012)
5. What would Gandhi have said? (30 Jan 2012)
Every so often we shall change this sample of previously published posts.