Sin Título

De Scott Sumner, sobre el euro. The Economist. Creo que no sobra ni falta nada.

Resumen: no hay solución óptima. La salida de un país (España, Italia) aumentaría los,problemas de otros (Italia, Francia). La unión fiscal no va a resolver nada, sino al revés, aumentar los problemas. La única salida es seguir haciendo ajustes fiscales junto con una decidida expansión monetaria. Aunque dudo que fuera suficiente.

THE euro zone doesn't have any attractive options right now, at least not any that are politically feasible. Of course one could always argue that Italy should adopt a radical set of policy reforms aimed at making their economy much more open and flexible. But there seems to be little chance that this sort of reform agenda would be able to overcome the powerful special interest groups that currently earn rents from barriers to market access.

So policymakers are faced with deciding among a set of painful choices, and trying to pick the least bad option. Many people currently seem attracted to some sort of fiscal union. This might help in the short run, but only at the expense of even worse problems down the road. The euro-zone countries have shown themselves incapable of achieving the sort of cooperation needed to make a single currency work. But a fiscal union requires far more cooperation, and seems even less likely to succeed. In addition, fiscal union wouldn't overcome the “one-size-fits-all” monetary problem, which has resulted in large parts of the euro zone ending up hopelessly uncompetitive.

Rather than doubling down on failure, it makes more sense for those euro-zone members that cannot make it in the long run to cut their losses and exit immediately. But even that would not end the euro-zone crisis, as the weakest remaining members would then come under attack. The euro zone thus needs a two-pronged strategy, fiscal austerity in those euro-zone members who are committed to stay, and monetary stimulus to keep the euro competitive for the weaker members that remain inside.

For example, if Greece, Spain and Portugal end up exiting from the euro, then with current monetary policy the euro would become too strong for the Italian economy to be competitive. If Italy left, the euro might be too strong for France. Hence the ECB would need to do its part by providing a more pro-growth policy. This might take the form of a 5% annual NGDP growth target for the euro zone over the next decade, with “level targeting” to make up for any under- or over-shoots. This would hold down the value of the euro and provide enough euro-zone growth to allow the weaker members to remain inside.

The conundrum currently faced by the euro zone is that the financial markets have lost faith in the government finances of the so-called PIIGS. And yet fiscal austerity slows growth, making the recession even worse. At some point politics intervenes, and as we saw in the 1930s the electorate has the last word. The only way to untie this policy knot is to combine fiscal austerity with highly aggressive monetary stimulus.