A Weaker Euro for a Weaker Europe
The debate about how to help deficit-ridden southern European economies is often presented as a conflict between them and the eurozone’s healthy core, particularly Germany. But a new and more important imbalance – southern Europe's trade and services deficits with China – suggests a possible solution to economic malaise: a weaker euro.
https://prosyn.org/iyTMzQL
VIENNA – What can be done to help the “crisis economies” of southern Europe reduce their external deficits? The debate is often presented as a conflict between the deficit-burdened PIIGS – Portugal, Italy, Ireland, Greece, and Spain – and the eurozone’s current-account-surplus countries, particularly Germany. But a new and more important imbalance has emerged in recent years: the PIIGS’ trade and services deficits with China, which suggest a possible solution to southern Europe’s economic malaise – a stronger renminbi.