Instead of using her visit to Greece Tuesday to reinforce the euro, German Chancellor Angela Merkel should work to eliminate it, says independent economist Roger Nightingale.
The euro reached a four-month high above $1.3150 in September, after the European Central Bank pledged to buy European government bonds to support it.
But Nightingale is unimpressed.
Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.
“You can’t judge the viability of a currency by its recent market rate,” he tells CNBC. “What you judge it by is whether the economy is stable. In the weeks before the Argentine peso fell 60 percent, it was fairly stable.”
Greece’s economy will shrink 6.5 percent this year, the government estimates. The International Monetary Fund just lowered its gross domestic product estimate for the 17-country euro area to a 0.4 percent contraction this year and a 0.2 percent expansion next year.
Given the eurozone’s structural flaws, participating nations should give up the ghost, Nightingale says.
“What I would recommend she [Merkel] do — and of course she won’t — is to recognize the euro is dead, and bury it,” he says. “Start again, recognize you have made a terrible mistake and start again.”
Not everyone sees Merkel’s visit to Greece as a waste of time.
“The meeting [with Greek officials] could mark the turning point to the Greek crisis,” Constantinos Zouzoulas, an analyst at Axia Ventures Group of Athens, tells Bloomberg. “This is a very significant development for Greece ahead of crucial decisions by the eurozone for the country.”
Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.
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