Even some Euro Architects are Becoming Pessimistic about its Future

Posted by Ian Cooper - Wednesday, January 12th, 2011

From New York Times:

"Otmar Issing, the influential former chief economist of the European Central Bank, warns that the common currency’s existence could be threatened unless member countries find a way to impose tougher spending curbs on one another.

“With the failure to make sovereign states’ fiscal policies consistent with the conditions for the single currency area,” Mr. Issing wrote in an article to be published this week, “policy makers not only have weakened the functioning of monetary union, but have also called into question its very survival.”

The article for the Official Monetary and Financial Institutions Forum in London is an updated English version of an article that Mr. Issing published in November in the Frankfurter Allgemeine newspaper in Germany.

Still, its publication in English will bring Mr. Issing’s views to a wider audience, and feed into growing fears that European policy makers have not taken the steps necessary to restore confidence in the euro.

“I have indeed become very concerned that politics fail to take the crisis as an opportunity to forcefully improve the framework” for monetary union, Mr. Issing said by e-mail Monday.

Mr. Issing’s views are particularly noteworthy because he was a key figure in the introduction of the euro."

Read more here.


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