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The Wolfson Prize judges said that Capital Economics had provided "the most credible solution to the question of how an orderly exit from the Eurozone by one or more of its member states could be managed."
• All wages, prices, loans and deposits are redenominated into it 1 for 1.
Euro notes and coins would remain in use for small transactions for up to six months.
• The exiting country would immediately announce a regime of inflation targeting, adopt a set of tough fiscal rules, monitored by a body of independent experts, outlaw wage indexation, and announce the issue of inflation-linked government bonds.
Bootle is one of the UK's most respected economists, and also writes regularly for the Daily Telegraph. Its Jeremy Warner points out that there is still one hurdle to clear – finding a eurozone country that wants to go it alone:
http://www.guardian.co.uk/business/2012/jul/05/eurozone-crisis-live-central-banks-poised-to-act#block-14
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Roger Bootle went on to argue that the real long-term danger to the euro is the possibility that Greece makes a success of leaving it (by benefiting from a new weaker currency, and shedding some of its debt burden).
That would tempt other countries to follow. As Bootle puts it, the "There is no alternative' argument" won't cut it anymore.
Bootle argued that the "best outcome" to the crisis would be for the 'Northern Core" to leave the euro. However, is more likely that weaker members in the South will exit, and revert to individual currencies.
Bootle said it would be "best for them to go to separate currencies.... The Southern euro doesn't make sense."
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Bootle explained that his 'central case' is that one country will leave the single currency. This would have to happen in secret (capital controls would be needed, to prevent people sending their money out of the country).
The country would then redenominate itself with a new currency, initially valued at a 1 to 1 rate with the euro (but floating, so it could find its own level).
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Αστέρας Βουλιαγμένης στα €160εκ, αντικειμενική €1-1.5δις,
via Ζάχαρη
The Wolfson Prize judges said that Capital Economics had provided "the most credible solution to the question of how an orderly exit from the Eurozone by one or more of its member states could be managed."
Here's their summary of the plan:
• A new currency is introduced at parity with the Euro on day 1 of an exit.• All wages, prices, loans and deposits are redenominated into it 1 for 1.
Euro notes and coins would remain in use for small transactions for up to six months.
• The exiting country would immediately announce a regime of inflation targeting, adopt a set of tough fiscal rules, monitored by a body of independent experts, outlaw wage indexation, and announce the issue of inflation-linked government bonds.
Capital Economics also recommends that government should redenominate its debt in the new national currency and make clear its intention to renegotiate the terms of this debt. This is likely to involve substantial default – perhaps sufficient to reduce the ratio of debt to GDP to 60%.All very sensible - the key issue is that Capital Economics argues that it is possible (despite the lack of an exit mechanism).
Bootle is one of the UK's most respected economists, and also writes regularly for the Daily Telegraph. Its Jeremy Warner points out that there is still one hurdle to clear – finding a eurozone country that wants to go it alone:
http://www.guardian.co.uk/business/2012/jul/05/eurozone-crisis-live-central-banks-poised-to-act#block-14
_______________________________________
παρακάτω
Roger Bootle went on to argue that the real long-term danger to the euro is the possibility that Greece makes a success of leaving it (by benefiting from a new weaker currency, and shedding some of its debt burden).
That would tempt other countries to follow. As Bootle puts it, the "There is no alternative' argument" won't cut it anymore.
Bootle argued that the "best outcome" to the crisis would be for the 'Northern Core" to leave the euro. However, is more likely that weaker members in the South will exit, and revert to individual currencies.
Bootle said it would be "best for them to go to separate currencies.... The Southern euro doesn't make sense."
_________________________________________________
Bootle explained that his 'central case' is that one country will leave the single currency. This would have to happen in secret (capital controls would be needed, to prevent people sending their money out of the country).
The country would then redenominate itself with a new currency, initially valued at a 1 to 1 rate with the euro (but floating, so it could find its own level).
_________________________________________________________
Αστέρας Βουλιαγμένης στα €160εκ, αντικειμενική €1-1.5δις,
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