Politics, Not Economics, Underpins the Euro
Otmar Issing, German economist, president of the Center for Financial Studies (Goethe University Frankfurt), former member of the Executive Board of the European Central Bank and an advisor for Goldman Sachs
It seems that a generation of monetary hawks have discovered pragmatism. They have noticed that Europe’s growing balance of payments surplus and slide into deflation is straight from the Japanese playbook of the last 20 years. The older generation has launched a fightback.
The stakes are high. It may just be a key moment. The events in Ukraine have served as a timely reminder of why the EU exists and what the euro is really for.
It’s never been about economics, it’s always been high politics. Vladimir Putin may have brought a coherence to European thinking and policies that recession and high unemployment could never achieve.