The Euro’s Demise Will Happen Sooner Than Many People Expect - Barron's

The Euro’s Demise Will Happen Sooner Than Many People Expect - Barron's



...Yet, Europe’s troubles never really abated. By 2015, the euro zone was again engulfed in crisis, with the focus primarily on Greece, whose banking system was in peril. Only then did the ECB undertake an expansive asset-buying program of its own, spending about 80 billion euros ($90 billion) per month. The ECB’s campaign (which is ending this year) infused the European economy with a total of €2.5 trillion over three years, and drove interest rates down to a negative 0.4%.



...Many hope that the current standoff will be resolved by an expansive budgetary policy that is in effect throughout the euro zone. Even if Germany and its satellites agree to implement such a policy, however, which is doubtful, it will have to be on a scale that is likely to cause an inflationary burst, currency destabilization, capital flight, and a dramatic increase in long-term interest rates.



...The most plausible solution to the latest impasse appears to be “Italexit”—Italy’s secession from the euro zone.