Lecture 07: Why the Euro is destroying Europe

The Euro was intended to unite Europe, and it has abjectly failed to do so. However ironically it has helped unite the economics profession, since one thing that economists from most walks of life can agree on is that the Euro was and is a bad idea. This lecture explains the critiques of the Euro and why the Euro has turned the economic crisis of 2008 into a localized Great Depression.

[milkywaysurfer]

Very interesting lecture! Thank you very much for the upload.

[allansmythe]

end of that lecture scares the ship out of me.

[pebblepod]

Wow the Euro currency and Maasarat treaty really was a thoroughly design!

[conscious_being]

Thank you Professor for yet another brilliant presentation!

However, I wonder if you considered the possibility that neo-liberalism is not an economic ideology born out of ignorance of Keynes, but a political ideology masquerading as an economic ideology necessitated by the knowledge of the impending limits to growth to be brought about by a peak in energy availability? Unless post-Keynesians, such as yourself, can also come out with an alternative that addresses the fast depleting resources available for economic growth, the only politically successful economic model will be the neo-liberal one. Pretending that every country can grow just by government spending or private borrowing after fixing the books will only result in high or hyper inflation. Increasing resource consumption in the OECD countries is no longer possible because the world doesn't have the resources to support it any more.

[javierwagner]

The barro argument pissed me off so much for its stupidity. I cant believe people take those assumptions seriously.

[simonclasse]

Good to see a lecture from a non Eu country

[ama-tu-an-ki]

Thank you for the clear presentation.

Next year (in 2016) Finland will have a parliamentary debate about leaving the euro, as it has proven to be suicide for Finland, the former model-student of the monetary union. No amount of cutting is enough and the economy has been in downward spiral now for 3.5-4 years (esp. exports). Natural exchange rate devaluation would solve this, which is impossible within the current monetary union. The only choice? Leave the euro. Yes, I know 'unimaginable' may become true sooner than the Germans think.

[econrith]

I always find it interesting that public service workers are taxed, yet the tax and the wage are of the same source as is the welfare cheque.

[עוגןרודן]

Greece, Italy, Spain. Every country different story. Greece is a touristic destination country, that before the crisis tried (successfully) live like Germany, while their productivity level was at the level of Costa Rica. Their economy was debt running and debt generating, without production and export capacity. When did you purchase last time a made in Greece product. The Greek government could borrow on basis of forgery of national statistics. You can lie sometime to someone, but not all the times to everyone. Of course when such an economic policy comes to end, Greece GDP per capita has to be adopted to realities to the neighboring Balkan states, like for example Bulgaria. And that is what actually happened. Greece couldn’t continue its public debt policy because there was noone to lend them. This is the reality. If debts doesn't have to be repaid, as to the well known Greek economist Mr.Varoufakis claims, him You mentioned in your very enjoyable lecture, it endangers the whole financial system, that is based on trust in debt repayment.
Spain is a completely different story. It’s real estate market focusing on German and British clientele collapsed, and so its real estate and banks. This is a normal economic phenomenon, even if a very extreme one, with sudden drastic change of consumers preferences.
I agree, the private debt is much more dangerous than the public debt, unless the interest rate is zero. But even then it shouldn't be exaggerated.

[SteroPro]

So what's the point, that's their goal, destroying weaks

[zabdas]

Remember 2 speed EU is Catholic south & Protestant north, the profligate south spend while the frugal north saves - end result another religious war coming soon!

[rdeyest]

People that think this is a good lecture don't understand data. They also confuse a currency: the Euro with an intergovernmental body: the European Union. There's also a lack of understanding the separate countries economic structures and why they were affected differently in the recession. It's interesting in as much as how this guy can draw such conclusions from the data.why does he assume things would be better if these countries had their own currency or were not part of the European Union? The professor also used misleading quotes at the begining making the audience assume the economic theorists quoted were talking about the EU and not the currency. He also doesn't seem to be able to remember acronyms. Or remember things like what 'Maggie' carried round with her. Something you kids might not realise is very often used as anecdotal.

[ironwoman]

Keen is a smart guy but has his biases. its absolutely true that we limit our spending because we know our taxes will be higher in retirement. those who don't are idiots who ignore math