Salient to Investors:
History may be repeating itself.
Historians take a longer and bleaker view on a Euro Zone breakup than economists.
In both cases, the founding generation was dying out as crisis hit and disintegration loomed.
Ruble zone breakup was led to runaway deficits and hyperinflation and every Soviet state suffered for the whole 1990s.
The Centre for Liberal Strategies said unions breakup from the core, not because of troubles in peripheral countries, so Germany is key. A joint currency requires glue that goes beyond common economic interests, requiring trust, an emotional sense of shared citizenship.
Russia dealt the death-blow to the ruble zone by setting ever-tighter restrictions and introducing currency reform in 1993 that took other members by surprise.
Historian Antony Beevor said that if the EU goes for sudden unification to control the economies of the south, then we will see an elective dictatorship from Brussels, with just the presidential elections being direct, which will reawaken the monster of nationalism.
Historian Eric Hobsbawm said the European attempt to become a federal state was and is never going to work because Europe hasn’t got a basis for unity.
Read the full article at http://www.bloomberg.com/news/2012-06-07/euro-breakup-precedent-seen-when-15-state-ruble-zone-fell-apart.html
Leave a Reply
You must be logged in to post a comment.