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Martin Wolf: Why the Euro Crisis is not Over

Good read here from today’s FT on the Euro crisis.  I essentially agree with his conclusion.  The Euro crisis cannot be over because the structural problem has not been resolved.  In other words, the currency union is not workable unless there is some form of permanent fiscal union or what would essentially become a transfer union much like the United States has in place (see here for more on this).

Via the FT:

“Those who believe the eurozone’s trials are now behind it must assume either an extraordinary economic turnround or a willingness of those trapped in deep recessions to soldier on, year after grim year. Neither assumption seems at all plausible. Moreover, prospects for desirable longer-term reforms – a banking union and enhanced risk sharing – look quite remote. Far more likely is a union founded on one-sided, contractionary adjustment. Will the parties live happily ever after or will this union continue to be characterised by irreconcilable differences? The answer seems evident, at least to me. If so, this unhappy story cannot yet be over.”

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