Friday, August 10, 2012

Problem in Europe is Arithmetic, Not Confidence

In my forthcoming book (Princeton University Press, February 2012) I argue that there is little chance that the euro survives the next few years, or that we avoid major sovereign restructurings and/or defaults.  I am not just talking about Greece, by the way.  I think a Spanish devaluation (accompanied inevitably by a sovereign debt restructuring) is pretty much a sure thing too, along with devaluations among many of the other obvious suspects. 

After I turned in the completed manuscript of my upcoming book, my editors were a little worried about my extreme pessimism over the euro, and suggested that I hedge a little so as not to look foolish if these things didn’t happen, but honestly I am less worried about that possibility than I am worried that by the time my book comes out Spain will have already abandoned the euro. 

No comments:

Post a Comment