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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

December 9, 2011 at 9:50 AM

Vote: Can the eurozone be saved?

Can the eurozone be saved? I’ll be writing about this Sunday in the Seattle Times. Nobel laureate economist Joseph Stiglitz is among the growing number of his colleagues who are pessimistic. In Project Syndicate, he writes:

Even if those from Europe’s northern countries are right in claiming that the euro would work if effective discipline could be imposed on others (I think they are wrong), they are deluding themselves with a morality play. It is fine to blame their southern compatriots for fiscal profligacy, or, in the case of Spain and Ireland, for letting free markets have free reign, without seeing where that would lead. But that doesn’t address today’s problem: huge debts, whether a result of private or public miscalculations, must be managed within the euro framework.

Public-sector cutbacks today do not solve the problem of yesterday’s profligacy; they simply push economies into deeper recessions. Europe’s leaders know this. They know that growth is needed. But, rather than deal with today’s problems and find a formula for growth, they prefer to deliver homilies about what some previous government should have done. This may be satisfying for the sermonizer, but it won’t solve Europe’s problems – and it won’t save the euro.

So, today’s poll:

Can the eurozone be saved?

Read on for the best econ links of the week and the haiku.

The Week’s Links:

Comments | More in Eurozone, Global economy, International economy

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