Former Czech President Václav Klaus criticizes the concept of the Eurozone as an artificial, controversial and inconsistent category, and prefers using the more precise phrase “introduction of the euro” instead.
According to Klaus, the euro is not a success, but one of the biggest issues of European integration. The Eurozone as a whole will not face any harm. However, those Eurozone countries that do not comply with the current euro exchange rate and the single monetary policy will face many problems.
Many were obvious beforehand: the economists mostly warned, although with a various amount of force and urgency, against introducing one currency in the non-optimal currency zone. Politicians – again, mostly – were not listening.
The assumption that the introduction of the common currency would lead to the gradual creation of an optimal currency zone was complete nonsense from the beginning. In twenty years of experience with the euro, this mistake was confirmed. The Eurozone is the slowest growing economic zone in the world. No one can reasonably consider it to be a success.
In the near future, some Eurozone countries will face threats such as the systemic risk of Italian banks (and some other European South Banks), or the ending of “quantitative easing” recently announced by Governor Draghi. The question is also whether the European countries disadvantaged by the euro will survive the end of easy financing of budget deficits when the European Central Bank ceases to buy their government bonds.
“Are these countries prepared for the ´bad weather´ such as the crisis of 2008 to 2009 caused?” Klaus concluded his answer.
