My rating: 4 of 5 stars
I went to see Professor Stiglitz talk at the LSE a few months ago and that's when I purchased this book, which I also got Joseph to sign for me. I've enjoyed quite a few of his books before including 'The Roaring 90's' about the boom in the Economy in that decade.
This is compelling reading. He shows that even the Success story of the European Union, Germany, has only had fairly anaemic growth since the European monetary union was formed. You can see this demonstrated here: http://www.tradingeconomics.com/germa...
At the other end of the spectrum, you have crumbling economies like Spain, Portugal and particularly Greece that according to Stiglitz is being decimated by the austerity measures imposed on them by the EEC and heavily enforced by member States like Germany.
The book made me feel better about Britain's decision to leave the European Union. Though admittedly this book is about the damage that the European currency has done to Europe, whereas Britain retained its own currency.
It also went some way to explaining some of the Economic struggles the EEC has gone through since the Euro was introduced 17 years ago; That the EURO has shackled a lot of Economies that may need the financial independence of their own currencies to perform to their highest potential.
He also questions the fact that an unelected body is imposing budgets on countries that their own people have rejected, for example in the case of Greece, which actually voted against these measures but had them imposed upon them by the EEC nevertheless.
This may be the reason why tax revenues have fallen significantly in some of these countries. 'No taxation without representation' was the rallying cry of another well-known revolution.
In addition, the Economics Nobel Laureate Joseph Stiglitz raises the question of Currency manipulation and who really benefits from the Euro. Much is made in the News about China artificially reducing the value of the Yuan in order to make their exports cheaper so that they operate with a trade surplus.
However, Professor Stiglitz shows that actually, German has a larger trade surplus than China. It's entire Economy relies extremely heavily on exports.
In February Germany's trade surplus--or the balance of exports and imports of goods--increased to 252.9 billion euros ($270 billion), which marks the highest surplus since records began after WWII. Because all the weaker Economies in Europe bring the value of the Euro down, Germany ends up with a currency that is 15% undervalued; thus creating their imbalance.
Conversely, countries like Greece, Spain, and even France, operate with a currency that is too high for their exports to be competitively priced; Hence their poor economies, high unemployment, lower exports and trade deficits (as opposed to Germany's surplus).
It seems counter-intuitive, but Professor Stiglitz believes that the only hope of saving the Euro in the long term is for Germany to leave the European Economic Union.
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