42 sats \ 5 replies \ @Satosora 19 Jun \ parent \ on: Eurozone facing acute debt crisis econ
I dont think it needs to be a hard transition, though.
If each country cobtrolled their own currency and bought euro with it, it would work fine.
the problem is, for example, that the southern european countries, which actually need a devaluation of their currency by at least 30 to 40% compared to the euro exchange rate, would be insolvent the moment they introduced their own currency. that means the entire credit market there would collapse, which would lead to the collapse of the entire fiat system. life in southern europe is much more complex, economically divided and tense than in the north. that would be social chaos. Don't think there will be a rational simple transformation phase here
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the problem with the eurozone and the euro is that the much more competitive north has established a kind of neo-mercantilism here. with an artificially low valued currency and a labor market for cheap labor, the south has been played against the wall, especially in the industrial sector.
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