tommy271
Forumer storico
Euro Zone's Survival Isn't In Question But Its Size Is
By Tom Barkley
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The euro is expected to survive the ongoing economic turmoil engulfing the continent, but there is a risk that countries in a financial tailspin could be forced to drop the common currency.
"I can't see the currency disbanding entirely [but] I can see that someone might pull out," said Joseph Gagnon, a former Federal Reserve economist, during a Dow Jones/Wall Street Journal foreign-exchange roundtable on Feb. 17 in Washington.
While European leaders have tackled the short-term threat from soaring sovereign-debt levels, the gap between core economies, such as Germany, and peripheral countries, such as Greece, poses a longer-term challenge for the currency union, said Gagnon, now a senior fellow at the Peterson Institute for International Economics.
Eswar Prasad, a professor of trade policy at Cornell University, agreed.
"If the core countries in Europe force upon Greece very significant adjustment, then perhaps Greece will balk," Prasad said. Since Greece is benefiting from what is in essence a budget subsidy, he predicted that any action would come from the wealthier countries.
Edwin Truman, who held senior international finance positions at the Federal Reserve and U.S. Treasury, said he sees only a 10% chance that a country such as Greece or Ireland would pull out of the euro zone. But he said he believes such a move would be initiated by the country itself.
"My sense is, if you have someone pulling out, it would be some person who comes to power in one of the peripheral countries, and they say, 'Forget it'," said Truman, now a senior fellow at the Peterson Institute for International Economics.
By Tom Barkley
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The euro is expected to survive the ongoing economic turmoil engulfing the continent, but there is a risk that countries in a financial tailspin could be forced to drop the common currency.
"I can't see the currency disbanding entirely [but] I can see that someone might pull out," said Joseph Gagnon, a former Federal Reserve economist, during a Dow Jones/Wall Street Journal foreign-exchange roundtable on Feb. 17 in Washington.
While European leaders have tackled the short-term threat from soaring sovereign-debt levels, the gap between core economies, such as Germany, and peripheral countries, such as Greece, poses a longer-term challenge for the currency union, said Gagnon, now a senior fellow at the Peterson Institute for International Economics.
Eswar Prasad, a professor of trade policy at Cornell University, agreed.
"If the core countries in Europe force upon Greece very significant adjustment, then perhaps Greece will balk," Prasad said. Since Greece is benefiting from what is in essence a budget subsidy, he predicted that any action would come from the wealthier countries.
Edwin Truman, who held senior international finance positions at the Federal Reserve and U.S. Treasury, said he sees only a 10% chance that a country such as Greece or Ireland would pull out of the euro zone. But he said he believes such a move would be initiated by the country itself.
"My sense is, if you have someone pulling out, it would be some person who comes to power in one of the peripheral countries, and they say, 'Forget it'," said Truman, now a senior fellow at the Peterson Institute for International Economics.
Ultima modifica:
