tag:blogger.com,1999:blog-3120478448417742445.post5195891138967950043..comments2024-03-24T06:35:14.281+00:00Comments on The Portuguese Economy: The end of Europe as we know itEditorhttp://www.blogger.com/profile/16779405217168307855noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-3120478448417742445.post-53388561421068684102011-08-22T19:43:33.226+01:002011-08-22T19:43:33.226+01:00The problem the EURO faces now is that there is no...The problem the EURO faces now is that there is no turning back. Taking peripheral countries out of the Euro zone would be a well deserved punishment, but that would bring huge costs on the entire union (defaulting or currency depreciation would result the same way for creditors). The only way EU will work is if these do indeed cut on public spending. And there is much margin in each of them to do so.Ricardo Batistahttps://www.blogger.com/profile/10098277528292100006noreply@blogger.comtag:blogger.com,1999:blog-3120478448417742445.post-32105998292611619942011-08-20T16:04:37.333+01:002011-08-20T16:04:37.333+01:00The problem of moral hazard clearly exists but I t...The problem of moral hazard clearly exists but I think that is the least of our problems, which could be solved as you said through an independent budgetary European entity. Although by independent I don't mean German-controlled, because we all know that the old-SGP 'died' when it stopped serving the interests of Germany (and France) itself.<br />My two final remarks:<br />(i) Didn't we all know that this would happen in face of severe adverse shocks, since the Euro zone is not an optimum currency area and even if it was would always require support from a political union, which doesn't exist;<br />(ii) When we are all discussing the 'costs' of the Euro and of Europe, shouldn't we all remember the value of peace and stability that European integration brought to a continent that never in its history had such a long no-war period.João Gabriel Fidalgohttps://www.blogger.com/profile/11945330102059078988noreply@blogger.com