Bloomberg: Denmark Should Cut Loose From Euro

[Antonio the Sixth]

At this point, I'd support letting every country who wants leave the Euro, and make a real, serious monetary union (including an central bank with a full mandate to promote growth, fiscal harmonization, and a mutualization of interest rates) with the countries that want it. Then we'll see who is serious about European federalism and who isn't.

[Antonio the Sixth]

I hate to tell you this,

You can't start a post with this and expect me to take it seriously. Luckily, nothing else in your post is worth addressing anyway.


@Politicus: Yes, I know, I wasn't really addressing the article tbh. It was just my basic reaction to what I assumed to be the gazilionth "Euro suxx" hackpiece.

[Antonio the Sixth]

@Politicus: Yes, I know, I wasn't really addressing the article tbh. It was just my basic reaction to what I assumed to be the gazilionth "Euro suxx" hackpiece.

It is a shallow article, but it does address the dogmatic character of the fixed (within a tier) exchange rate policy in Denmark - the author mentions how this was taken for granted even in a university course in economics he once took in Denmark and how he found that very strange. 

"When I studied economics at the University of Copenhagen, we learned about the macroeconomics of small open economies, various exchange-rate regimes from both a theoretical and historical perspective, and optimal currency areas. But when it came to Danish monetary policy, we weren't asked to apply any of that. Instead, we were simply told that abandoning the peg was impossible: Foreign investors would immediately dump all their holdings of Danish government bonds and the economy would be in ruins."

Btw Denmark established a fixed (= tiered) exchange rate to the Deutschmark back in 1982. Of course the Deutschmark was a strong currency so you did not get upwards pressure on the krone back then, but the issue of the pegged currency predates the EMU. Which made it strange to turn it into a Euro-debate. A comparison with Switzerland would be more relevant.

Yeah, fixed exchange rates without a possibility to have a voice in the monetary policy of the currency you tie yourself to doesn't seem like a very sound policy. Especially when said monetary policy is entirely focused on combating inflation instead of balancing inflation and growth concerns like any sound central bank would do. And by the way, I'm the first to say that the Euro, as it currently exists, is dysfunctional, and I'm pretty sure Germany is the only country that has a real interest in preserving the status quo (although even that's debatable).