The dumb economics of opting out of the Eurozone (Protesilaos Stavrou)
Impressively concise assessment of what it means to belong to a currency union — in this case the Euro — offered this week by Protesilaos Stavrou, a young European studies student from Cypress (“Should Germany leave the euro and let others crash and burn?” Aug 27, 2011).
Excerpt:
Countries in a currency union are interconnected, since they have first abolished all or most of the trade barriers between them, their economies have practically merged into a single market and their banking sector, as well as other important sectors of the economy, are organically linked. Severing a part of this “organism” will doom both the part and the whole just as if a vital organ is removed from the human body where both die.
The reason that is true is because the country that opts out will trigger a chain effect in the banking sector and in all other sectors it can influence, which will see private banks and other corporations falling one after the other just like in a domino.
Read full post here. (Saw this link at Bloggingportal.eu)
