Watch it all.
Niall Ferguson talks about the role of French President Francois Hollande in Europe's debt crisis
Posted in * Economics, Politics, * International News & Commentary, --European Sovereign Debt Crisis of 2010, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Euro, Europe, European Central Bank, Foreign Relations, France, Germany, Politics in General, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--
I know it sounds a bit nerdy and technical he says, but if there really is a major European bank run it will hurt everyone. Indeed, it has already started, Europe is in a lot of pain, China is being affected, and it is starting to impact the U.S.
“This is big stuff…” Indeed it is, which is why it is a blog focus,among other matters.
Niall Ferguson is a very smart man. I have watched and listened to a number of his speeches and also read some stuff by him. I am not saying he is infallible or that I am always in agreement with him. But when speaks, I pay attention and give whatever he is saying very serious consideration. I can’t say the same for many of the other eco-pundits out there.
He is out of his tree:
Eurobonds: ‘If Hollande can get all the other European leaders to gang up on the Germans we might get a change of policy in Berlin’
Why would the Germans, the only solvent country in central and southern Europe, risk their economy further for these beligerent countries? They are already footing the bill for much of the others, and are fed up with the attitude of the Greeks and Italians, and now the French.
Greeks exiting the Euro – ‘the big solution which I think is the only really credible solution…European-wide liability on national debts’.
Yeah, right – the Brits and Germans guarantee the borrowing of the Greeks, Italians, Spanish, Portuguese etc etc, and we loose our triple A rating and we are borrowing at interest rates like they are and from the same boat.
He fails to address the issue that for the Greeks, their problem is that they are tied into an exchange rate they cannot shift which makes them structurally uneconomic, it is not a matter of reducing borrowing costs, sharing debt or issuing Eurobonds, but of ensuring that they can return their economy to competitiveness.
Typical academic – follow his advice and wreck your economy! His analysis of what is happening is correct, but his suggested solutions, Eurobonds and shared national debt are a recipe for disaster, but no doubt will please those who wish to see a European superstate run by the French and the Germans. Ugh.
I was bewildered as well. I always thought Ferguson was a rightwing capitalist. This is just corporatist-statist madness.
Mr. Ferguson is an historian, not an economist or public finance boffin. I enjoy much of his writing and commentary, but I’m not sure his views in this area should have more weight than any others.