David Blanchflower, a professor at Dartmouth College and former policy maker at the Bank of England, says the Euro crisis is headed for disaster. Blanchflower’s comments would normally seem extreme, however, he’s among the unique few who have an inside look at European monetary policy. Blanchflower says the EMU is too far behind the curve at this point and that they have simply kicked the can.
The more time that passes without a real Euro resolution, the more it will boil and the more combustible the situation will become. Blanchflower is exactly right. He understands that austerity is not working and that the Euro remains fundamentally flawed. All the while, the periphery countries are slowly realizing that they’re losing while the core benefits. And as the political unrest increases the situation becomes increasingly risky. European leaders need to work together to get out in front of this.