Posted on 05/19/2004 4:58:50 AM PDT by Nasty McPhilthy
Friedman: 'Strong possibility' of euro zone collapse 17.05.2004 - 08:31 CET | By Richard Carter EUOBSERVER / BRUSSELS - Milton Friedman, the Nobel-Prize winning US economist and one of the most influential economists of the 20th Century believes there is a "strong possibility" that the 12 member euro zone could collapse "in the next few years".
In an exclusive interview with the EUobserver, Professor Friedman argues, "there is a strong possibility that the euro zone could collapse in the next few years because differences are accumulating between countries ... I'm not saying it is a certainty, just that it is a strong possibility".
He suggests that the euro could be replaced with the old national currencies.
New member states, new problems His main concern with the workings of the euro zone is that it is difficult to have an economic union between countries that have substantially different economies, cultures and languages.
He believes that these problems are set to mount with the entry of the ten new member states.
Although he concedes that "actually I think that the euro has been doing quite well so far", he says that "there are problems facing it especially when you consider that you have the ten new countries in the EU".
The new countries are legally obliged to join the single currency and four of them (Cyprus, Estonia, Lithuania and Slovenia) have indicated that they intend to join it as soon as possible.
Professor Friedman believes that "there are certainly different problems for different countries" but advises, "if they are going to join, the sooner the better".
EU's economic goals are "a nice dream" Professor Friedman, who played a pivotal role in shaping the US economy in the latter half of the 20th century, is not optimistic about the EU's chances of fulfilling its self-imposed economic goals known as the Lisbon Agenda.
He said, "No I do not think that the EU can catch up with the US by 2010. It is a nice dream, a good hope and I wish them well, the world would benefit".
"But I think the chances of achieving it are very slim. The rest of the world is not going to stand still. India is not going to stand still, China is not going to stand still and the US is not going to stand still".
Furthermore, he believes that the EU - and even the US - will eventually be caught up by the rapidly growing economy of China.
"It is almost certain that, at the current rate of growth, China will overtake both the EU and the US. But this is quite a long time down the road".
Stop strangling your economies But the Professor, who was awarded the Nobel Memorial Prize for economic science in 1976, has plenty of advice for the EU.
"There is no doubt what the EU should do. Abolish your rules and regulations. Abolish your [high level of] spending. The European economy is too burdened with rules and regulations".
"There is nothing wrong with the basic strength of the individual countries. But they have burdened themselves with a range of rules that strangle their economies".
It seems that the EU has a rule and a reg for almost every occasion. What possessed them to establish this level of control for everything in daily life???
Remember that guvs dont want people to think for themselves! I cant wait till euroscum collapses!
Wake up, it is happening here in the USA also!
Their elites' impulse for more control. They are Utopians, you know.
That's what socialists do naturally.
I am reluctant to disagree with Friedman, but can China sustain its current rate of growth for a "quite a long time"? I don't think so. I'd say China and the EU may be in a race to see which falls apart first.
what worries me is that if anybody tries to leave the EU, will the leadership call in the troops to keep them in, and if so, will we be dragged into it.
And my bet is that France and Germany will be the bad guys.
I agree with Dr. Friedman's prediction. Since the backing of the money supply is actually the strength of the economy (modern countries have long ago ceased backing their money supply with precious metals) I have often wondered how a single Euro currency would fare if even one of the participating economies tanked. Given the dismal state of European economies in general, it would be no surprise if one fell off the edge and caused a run on the Euro.
I don't see it happening. But I'd love to watch the UN reaction!
The breakup of China would be far nastier than that of EU. I agree that both will break up in time.
How are their economies? What happens when the weakest economies are the first to adopt a currency?
don't be too sure. the first responsibility of leadership is to maintain the entity. If you can't hold it together then you are unfit to lead, and your competence is questionable. It is incumbent upon the EU leadership to keep the union together as it was incumbent upon Lincoln to hold the US together in the 1860s.
and they must use "necessary force".
The socialist spendthrift ways of France, Germany, and Italy will bring down this house of cards.
I suspect that was the idea.
I think you're right. I'm puzzled why Friedman would make such a claim. You would think that the guy who wrote "Free to Choose" would recognize that you can't have a vibrant and dynamic economy without the political and legal framework necessary for individual liberty and private property rights. But then, he's a "Nobel Laureate", which makes his judgment immediately suspect.
Any growth we see in India and China now is due to their stagnant and stultified economies trying to catch up in a flash within a small window of opportunity caused by a minor liberalization of their respective government's iron grip. We now see that socialist India is reverting to socialist/communist form, with the resultant market collapse. Look for the same thing to happen to communist China.
It never ceases to amaze me how people disregard the multitudinous evidence of thousands of years of economic history and continue to advocate the failed policies of command and control economies. Surely, this seemingly inherent human prejudice and blindness is another indication of "Original Sin".
What would the Frogs and the Krauts do if Poland and the Czech Republic decided to pull out of the EU at some point.Huff and puff? That's about all they're capable of. Their militaries have been emasculated to the point where they are a threat to no one except maybe some poor little country in Africa. Hell, the Germans now allow their gay soldiers to sleep together in their barracks. That's sure a military to be worried about isn't it?
Synopsis: With the world's old alliances and economic order shattered by a ruinous trade war, France and Germany seize the chance to build a new European order. Poland and the Czech Republic stand in their way, and when America and Britain join them, northern Europe explodes into war.
Would be a short war. We could make Europe starve in a matter of months, if not weeks.
OH NICE!
someone stole my highly intelligent insight and intuition! is nothing sacred anymore? ;-) (pout!)
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