Eurozone leaders warn that a recession is coming. Yup: and whose fault is that?

January 4, 2012 08:21

The reason that the eurozone faces such hard times is that its leaders have decided to keep the single currency together at any cost. The coming recession is not some inexorable force of nature; it is a consequence of the policies being pursued by Merkozy, Monti, Barroso and the rest. – The Telegraph


By Daniel Hannan at The Telegraph


While David Cameron struck an upbeat and patriotic note, the chanting from the palaces and chanceries of Europe was like some monkish threnody. Nicolas Sarkozy called for stoicisim in the face of ‘the worst economic crisis since the war’. Angela Merkel said that 2012 would ‘without question be worse than 2011’. Mariano Rajoy announced the end of mid-week public holidays, telling his countrymen, ‘this is no time for fiestas’.


Had Greece kept the drachma, it would never have got into its present mess: the markets would have stepped in and imposed a corrective years ago. It was the ludicrous idea that Greek and German debt were interchangeable that fuelled the artificial boom, and so made inevitable the ensuing slump.


Since the crash, Ireland has also had to deal with a 20 per cent competitive devaluation from its chief trading partner, the United Kingdom. And, as if all this were not bad enough, it has had to borrow hundreds of millions more to send to Portugal and Greece in the bailouts.


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