European leaders will unite to save the euro, a currency that is indeed worth saving, Steve Forbes says.
“The euro has facilitated flows of capital and reduced the cost of doing business across borders," he says.
"Greece's economic behavior has been bad, even by European standards, but that doesn't discount the idea of having a uniform currency,” he recently wrote in Forbes magazine.
“Illinois may well be the worst fiscally managed state in the Union these days, but that doesn't mean the dollar will collapse. It just means the citizens of Illinois will suffer disproportionately, and they will have to pay more to borrow money.”
Though French President Nicholas Sarkozy has threatened to pull out of the European Union, due to the current controversy, Forbes reckons this will not happen.
“The euro has spared Greece from an even greater disaster: poverty-inducing hyperinflation. If Athens were still using the drachma the government's response to its fiscal difficulties would have been to turn on the printing presses, thus engulfing the nation in terrible inflation,” Forbes wrote in his Fact and Comment column.
“This impoverishment would have been far more extensive and destructive than what the Greek people are currently experiencing. Just look at what hyperinflation did to Germany in the early 1920s.”
According to Forbes, the European central bank could firmly shore up the euro by fixing the currency to gold.
“Greece's economic behavior has been bad, even by European standards, but that doesn't discount the idea of having a uniform currency,” writes Forbes.
Others agree. Business Week is reporting that another nation, Estonia, is getting ready to join the euro, even as the Greek crisis rages.
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