October 20, 2014

Europe, it doesn’t matter whether you’re Eurozone or not, EU or individual countries… risk aversion will take you down

Sir, Wolfgang Münchau writes: “Eurozone policy makers face three choices. First, they can transform the eurozone into a political union… Second, they can accept secular stagnation. The final choice is a break-up of the eurozone. As the political union is firmly off the table, this leaves us with a choice between depression and failure–or both in succession”, “Eurozone stagnation is a greater threat than debt”, October 20.

How depressing. But, whether to survive as the Eurozone, or as individual countries, one thing is sure. Europe, or at least some of its nations, must get rid of that risk-aversion which has infiltrated them by means of the credit-risk-weighted capital (equity) requirements for banks. Those are keeping Europe’s banks from financing the future, having them only refinancing a day by day less sturdy past.

I am writing the script for an exhibition at a European history museum… in order to try to change the course of history. It is loosely titled: “When Europe had enough, did not want to chance it more, called it quits, and began to stall and fall”. If the exhibition comes to fruition, articles like this, and many others of FT, will be part of it.