Nobel Prize Winner Follows My Idea of a Northern and Southern Euro

After more than one year since I published my article on the idea of s bicameral Europe with a northern euro (neuro) and southern euro (seuro),, Joseph Stieglitz,Nobel,prize winner has written similarly in the Financial Times in support of this dual euro. I congratulate him and the Times for catching up.

This reinforces what a number of my important audiences have underscored. The material in this blog has been stimulative of important debate on institutional reform. Whether Stiglitz or his researchers have actually read my article is far from the point.

I think furthermore, the bicameral EU needs exploration before the whole EU project falls apart. There is too much gloom coming out of Brussels instead of sensible efforts to reshape the project to better meet the needs of members, thereby depleting radioactive criticism against it by ever growing populist forces.

The northern euro would likely appreciate against the US dollar depending also upon how it is set up. Its existence, properly done could reduce US criticism by the Trump administration of Germany supporting a weak euro. Germany would be the anchor country of the neuro with Holland and one or two Nordic countries being included if not more. More importantly, the weaker countries with the depreciated southern euro would become more competitive and be a lot less locked in to a rigid euro as is.

Most importantly, both euros would still be backed up and managed by the European Central Bank, possibly with new northern and southern divisions with the southern one managed out of Milan. Thus with ECB backing, no one would believe the southern euro would become like a bad lira in the old bad days of the too weak and inflationary Italian currency.

With Italy now being home to a major ECB division, in the politically restless, anti-E.U northern Italy, this might help better make such a key member country more hopeful about the euro and the EU. But I would not overemphasize it as an overarching solution but one important piece of EU reform.

The time has come to explore what I call the Dash-Stiglitz proposal for a northern and southern euro which would be a major step in possibly better preventing any more Greeces fiscally speaking and to edge away an Italy and othe EU member exits particularly those in the euro zone.

It is hoped that a solid analysis will be done by independent academics and experts, well beyond the ECB status quo forces who are comfortable with no changes as the periphery and its people economically bleed away. Currency reform in the euro zone is needed and in a hurry. The Trump administration and upcoming European elections may eventually drive it.

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