Ambrose Evans Pritchard isn\’t the only person who has been saying this:
My point is – and always has been – that launching the euro was the easy part. The test would be 1) whether countries with vastly different structures, trade patterns, wage bargaining systems, debt structures, sensitivities to interest rates, productivity growth rates, and historic inflation rates would diverge so far over time that this would threaten the viability of the system.
2) Whether EMU could weather a bad storm without single treasury and debt union to back it up.
3) Whether the eurozone bloc had the “solidarity characteristic of a nation” (the Bundesbank’s term) required for it to endure through bad times.
As Jon Livesey and others have pointed out on my last blog, the euro-zone is not an “optimal currency area” – OCA in the jargon.
I was saying it back in 2002 for example. Nothing\’s happened so far to make me change my mind.