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Jacques Delors: “Euro doomed from start”

“The euro project was flawed from the start and the current generation of European leaders has failed to address its fundamental problems, Jacques Delors, the architect of the single currency, declares today” – this according to an interview in the Daily Telegraph.

This is from the Telegraph:

“Jacques Delors, the former president of the European Commission, claims that errors made when the euro was created had effectively doomed the single currency to the current debt crisis. He also accuses today’s leaders of doing “too little, too late,” to support the single currency.

The 86-year-old Frenchman’s intervention comes the day after France and Germany took another step towards the creation of a full “fiscal union” within the European Union and David Cameron insisted that Britain must remain a major player in Europe. Mr Delors, who led the commission from 1985 to 1995, played a central role in the process that led to the creation of the euro in 1999. In his first British newspaper interview for almost a decade, he says that the debt crisis reflects a threat to Europe’s global role and even basic Western democratic values.

Mr Delors claims that the current crisis stems from “a fault in execution” by the political leaders who oversaw the euro in its early days. Leaders chose to turn a blind eye to the fundamental weaknesses and imbalances of member states’ economies, he says.

“The finance ministers did not want to see anything disagreeable which they would be forced to deal with,” he says.

The euro came into existence without strong central powers to stop members running up unsustainable debts, an omission that led to the current crisis. Now that the excessive borrowing of countries such as Greece and Italy has brought the eurozone to the brink of disaster, Mr Delors insists that all European countries must share the blame for the crisis. “Everyone must examine their consciences,” he says.”

HT “Enzo the Kenzo”

——
Update: Scott Sumner as an excellent comment on who is to blame for the euro crisis. Scott’s conclusion: The “victims” (Greece, Spain, Italy) are to blame themselves for overly loose fiscal policies, but “Enough blaming the victims. Now let’s start blaming some villains. If the ECB keeps NGDP growing at 4% after 2008, it’s likely that Greece would be the only country in crisis right now. The others would certainly still have structural issues worth addressing, but nowhere near as severe as the problems they current face.”

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3 Comments

  1. Benjamin Cole

     /  December 4, 2011

    Right-o.

    Reply
  2. Interestingly, Bernard Lietaer, another architect of the Euro feels the same way…indeed, he believes that the core of our current monetary arrangements in all modern cultures is unsustainable.

    I wrote a post a long time ago outling a biological model of a sustainable ecosystem, and then applied the concept to economics, with the conclusion that the mechanics of our money system causes fragility, which then became the basis of my “too brittle to sustain” hypothesis of financial panics.

    Reply

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