[JasonC]

Sorry, the article is hyperventilating nonsense.

The EU economy, no great shakes to start with to be sure, is not going to roll over and die because the Euro is strong. The EU central bank can cut their IRs anytime it likes. All currencies are losing value compared to commodities (gold, oil, etc), the Euro just isn't falling as fast as some others. IRs are too low worldwide, everybody is trying to manage their economy exclusively by printing more, while credit standards remain unsound, savings rates abysmal, geopolitical policies completely irresponsible, etc. All will just end in another bout of stagflation, until people get serious again. China and the other BRICs will be the gainers, the old world (EU and US) the losers.

[aroundabout]

Aren’t they worried about inflation? And is this precisely why they have not cut rates? Why else would they leave themselves at such a competitive disadvantage vs the US? Look what’s happening in Canada now with the loonies value vs the dollar a + 60% or more. Their economy has shed jobs rapidly over the past 18-24 months and at an accelerating pace.

Canada won’t do the obvious and lower rates either for fear inflation will be worse then what they face now. Europe is in the same boat.

[Hawthorn]

> the article is hyperventilating nonsense <

As is almost everything else written by Ambrose.

[ScaniaBoy]

You make some good points, but you don’t seem to appreciate the large difference between the Club Med and the economies of northern Europe, nor the political game between the French and the Germans on who is going to control the European central bank (ECB).

Historically, those kind of problems have scuppered more than one currency union. One would be very unwise to to discount a major rift in the eurozone.

[BfloGuy]

The EU economy, no great shakes to start with to be sure, is not going to roll over and die because the Euro is strong.

The overall EU economy won't die, but that won't much matter to the Italians, the Spaniards, the Greeks and the Portuguese (referred to by the author as Club Med).

The northern countries will weather a downturn, but the southern group (France can be included) are in very bad shape and this is why he speculates about the future of the currency itself.

The EU is a "country" in name only. The idea that its members could unite and reconcile their individual economies and governing styles was an extremely utopian and, I think, unworkable idea.