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View Diary: The Intellectual Foundations of Austerity destroyed (7 comments)

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    The Euro is causing a lot of problems for EU countries- particularly smaller countries on the periphery - in part, as you say, because it doesn't act as a lender of last resort, and in part because, unlike the Fed, it has no mandate to promote full employment. But the bigger problem is that it is difficult to persuade German taxpayers to fund Greek debts -so the problem is the opposite of what you suggest - the fact that EU member states do retain considerable sovereignty and can block transfers from better performing countries to less well performing countries - unlike the US where richer states effectively subsidize poorer states.

    Europeans have rather too much experience of the dangers of nationalism and are reluctant to unpick the peace that the EU has enabled over the past 60 years.

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