My cunning plan to solve the Eurozone crisis
14 November, 2011
It’s simple really. As John Maudlin says: “… the money to solve the crisis does not exist. The only way to find it is for the ECB to print money and print in size, enough to lower the value of the euro and make exports cheaper (which gives southern Europe a chance to grow out of its problems).”
That’s step one. But there would remain the problem of the relative uncompetitiveness of the peripheral countries, especially Greece. So here is my cunning plan, worthy of Baldrick at his best: all German workers would be required to be given a 30% wage increase by their employers. (Same would happen in quasi-German satellites such as Finland, Austria, Netherlands.)
This would, at a stroke, level the competitiveness playing field within the Eurozone while, at the same time, putting lots of new Euros into the hands of Germans to spend on Greek holidays, Spanish wine and Italian shoes.