Thursday, 10 November 2011

Eurozone debt crisis

I was in the European Parliament last month, representing the Green Party in a workshop on the debt crisis in Europe. Most of the Eurozone Greens are keen on the Eurozone and while England and Wales Greens are opposed to joining the Eurozone, the crisis is not going to miss us just because we are outside.

As I have argued previously, the Eurozone creates inequality and poverty among its member states. Monetary union without fiscal union (and therefore redistribution of wealth controlled by a superstate) won't work. Of course fiscal union and a superstate would be appalling - a real centralisation of power creating alienation in local communities.

Local currencies create a useful firewall between states. Allowing a partial default in Greece would be easier and safer if the default resulted in a revaluation. Of course that can't happen if you share a currency.

And contagion is less likely with separate currencies. Italy is wobbling, Portugal and Spain may be next and there is no guarentee that France is that secure. Ireland has already tripped over once.

It may be that the break up is a good thing and news that discussions have been had should be welcome.

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