The "Euro drama" in Four Steps
Euro, the EU currency, is undergoing a lot of difficulties that could definitively stop it. –there are a lot of opinion about –euro and his future. In his blog, Paul Krugman, an American Economist who won the Nobel Prize in Economics in 2008, foresees the end of Euro passing through four steps. In his play, the major role is played by Germany and ECB, the European Central Bank.
Let’s see the four steps of Euro drama1- Greece comes out of Euro Zone, next month maybe. 2- In Italy and Spain people try to transfer much money as possible from their banks to Germany. 3a- Maybe all these money transfers will be controlled more strictly. Money tranfers and withdrawal could be limited 3b- As an alternative, or at the same time, European Central Bank could start to lend huge quantity of money to banks not to let them die off. 4a- Germany has a choice. Accept that Italy and Spain get a great loan from ECB. Than, change its behavior completely: to give those Countries, above all Spain, hope, is necessary letting them financing with a low interest rate and to have an higher inflation rate in order to adjust prices. Or… 4b- End of Euro… And we talk about months, not years!
And you? What do you think?