Euro: Divergences continue to grow!

The disadvantage of common currencies is that they unfortunately do not tend to converge the different productivity levels of the participants, as the nice theory goes.

Quite the opposite! Before the introduction of the euro, the low-productivity economies of southern Europe were able to cushion the impact of trade deficits and lower productivity by continuous currency devaluation, which is not possiblewith a common currency.

Since the Great Financial (Public Dent) Crisis, to take Greece as an example, people in the south have suffered massive losses of income in real terms in order to compensate for the competitive disadvantage that they feel their overvalued currency has put them at. It simply cannot go on like this!

#Euro #ECB #Greece