debate: should germany leave the eurozone?

roger bootle reuters - germany should

germany will never leave (ft)

germany should leave

eurozone crisis debate

Basic Euro History
1991: Maastricht Treaty – pathway for Euro
1999: Euro starts life as a currency
1999-2001: Original members of system lock their currencies for two years
2002: Notes and coins come into circulation
2007: Slovenia becomes first of the new member states to enter the currency union
2008-09: Three new nations – Slovakia, Cyprus and Malta – the Euro Area extends to 16 nations
2011; estonia joins 17 nations in Eurozone

the future of the euro (bbc stephanie flanders oct 2011)







Euro essentials
Monetary union is a deepening of economic integration between participating countries
A single currency requires a common interest rate for the Euro Zone – i.e. a common monetary policy
Countries have locked their currencies together forever and adopted one currency as a medium of exchange
Euro as a currency floats against US dollar and sterling
Member nations are also required (in principle) to keep control of government borrowing i.e. They are not allowed to run large budget deficits > 3% of their GDP (in normal times)

Challenges facing the Euro Zone
1/Little common fiscal policy
Big differences in size of fiscal deficits and debt levels
Fiscal stability pact has effectively collapsed

2/ Growing risk of one or more Euro Area countries defaulting on some of their debts
Will Euro Area nations bail out fellow members?
Years of fiscal austerity for some nations will create deep economic and social pressures

3/ Doubts about the likely strength of recovery
Unemployment high and rising

4/ Longer term challenges
Growth and employment creation in the Euro Area has not been noticeably higher than in countries outside the currency union
2008-10 crisis has highlighted the problems of setting a common interest rate for 16 nations
Larger economic imbalances within the 16 nation currency union over wage levels, trade balances and productivity will also need to be addressed if the Euro Zone is to avoid future crises
Several weaker countries have become uncompetitive inside the Euro and this requires painful corrective policies which will be unpopular

Rising cost-push inflation could lead to higher interest rates and choke off confidence as recovery starts

Crisis links 2011:

ft eurozone crisis page

bbc eurozone crisis + global economy page

aljazeera euro crisis page

martin wolf oct 18 2011

chain reaction default








bbc on launch of euro (1999)

map growth of eurozone

where is the coin from?

eu euro homepage

monetary policy issues:

ecb homepage

price stability cartoon

price stablility report

inflation dashboard

eurozone report 2009

Research links
http://observer.guardian.co.uk/euro

inside europe (bbc)

eurozone graphics

euro introduction (t2u)

t2u blog posts euro

greece in depth (ft)

newsnight 24/06/2011 (1.00-15.00/ 27.48-43.30)

#euro (twitter)

#greece (twitter)

exchange rates

Sterling outlook: What next for the pound? | This is Money

currency wars and QE (ft 31 oct 2011)

demise of the dollar (wsj)

wsj currency page

currency wars flanders (bbc)

the currency puzzle - project syndicate

ex latest (t2u pdf)

revision note of floating x-rates
presentation on fixed and floating exchange rates

Download printable handout (pdf) of presentation slides

Rejoice – the pound is down again - Times Online








assignment on xrates (t2u)

x-rates intro as (t2u)
effects of x-rate movements (t2u)

dollar as the world currency - discussion (bbc newsnight)

ft interactive on currencies

depreciation of pound short term fix (independent 2010)

roger bootle independent 15/03/10 time lags exchange rate and deficit


streamed presenation on world x-rates (t2u)

ocr x rate essays

Quiz
Currency_Crossword_Quiz.pdf
Answers
Currency_Crossword_Answers.pdf

exchange rate videos

labour markets + poverty

ifs and rising poverty (bbc oct 2011)

Balance of payments policies

economicsonline trade policy notes

UK Govt support for Industry

balance of payments