Back in December we pointed out the patently obvious: in the absence of an external rebalancing mechanism, i.e., a free-floating currency, the only option for the bulk of the periphery to regain competitiveness was through ongoing wage collapse and persistent localized depression. Five months later, just as predicted, Europe is in a worse shape than ever before, not only in those non-core countries where wage deflation is accelerating, but the weakness has fully spilled over to the core. Of...Read Full Story
Oskar Lafontaine, the German finance minister who launched the euro, has now called for its break-up in order to let southern Europe recover.
Ambrose Evans-Pritchard of The Telegraph does the reporting:
“The economic situation is worsening from month to month” says Lafontaine
Lafontaine blames much of the crisis on Germany’s wage squeeze to gain export share
More here: German euro founder calls for ‘catastrophic’ currency to be broken up
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