Questions for IMF - is the Eurozone fundamentally flawed

22 Sep 2011 Sky News
This is a great question asked by Alan Beattie of the Financial Times. There can be no doubt that the euro will collapse, it is just a matter of when and by how much. You could approach the date of the collapse I suppose if you had the right tools and the level of granular data going back decades...


[Given the continued discord do you not think the euro zone is fundamentally flawed? Look at Italian bond yields -- don't you think the markets will drive countries to default before the governments have made up their mind?]

I think it would be in the best interest of all if we looked at the positive side of things rather than the negative side of things. There is a gap between the very strong government commitments and the implementation time. That is inherent to parliamentary life. We are no longer in the Napoleonic times when a leader could snap their fingers and make it happen. We are in democracies and it takes time. I'd like to observe that in their July 21st agreement there was indeed financial commitment, there was a political determination to be in it together, there was an open-ended financial support provided that countries were delivering under their commitment for those countries that are under programme. And there was also a collective drive to reinforce the governance and discipline in the group. I think the message is getting through.

There is implementation by the Greek authorities and the European partners.

You have to appreciate Alan because you write about it....it is not only about economics and finance, it about political destiny amongst countries that have spent centuries fighting with each other and which are determined to stay with each other [oh my god]

It might have been flawed; it might have contained deficiencies in the architecture. But the governments are now saying we are addressing that, we are strengthening the governance rules, the discipline and the right majority rules that will keep everybody on track as was predicated by the Growth and Stability Pact which has not delivered what it should have delivered because it was not associated with the appropriate degree of discipline and rules.




I think they are preparing for the endgame. It is a damage limitation process at this point. Similar to when Tsars and Generals carved up countries before and after wars had ended.

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