It is twelve years since the launch of EMU. There has been no meaningful convergence of the disparate economies since then. The one-size-fits-all monetary policy continues to cause havoc. All that changes with the evolving economic cycle is a rotation in the locus of stress, and a change in its features. Meanwhile, everything is tilted to meet the German imperative, but not enough to satisfy Germany. Nobody is satisfied. Membership of monetary union as currently constructed is like walking with a sharp stone in your shoe, forever. You can put up with it, or take the stone out.I can't see why everything should not be tilted to meet the German imperative. After all, who pays the piper calls the tune - unless, of course, you are British, in which case your rulers have cunningly arranged things so that you pay the piper but have no say whatever over what tune will be played.
7 March 2011
EMU is a flightless bird
Another trenchant Ambrosian analysis of the European Monetary Union in today's Telegraph: