INSTITUTE FOR BALTIC FREEDOM & PROSPERITY

MY Two Euros (SEURO & NEURO) Proposal: Maybe still not to late to rescue the Euro and the EU: DOG CHASING ITS TAIL: THE INTELLECTUAL POVERTY OF THE EURO PROJECT
By Val Samonis, VU and INET
The Eurozone's (EZ) problems are much more fundamental than the nature and extent of its banks competition that Europeans seem to concentrate on. The intellectual poverty of the Euro Project lies, basically, in the inability to understand that productivity/competitiveness of Southern or Central/Eastern Europe will remain far behind Northern European levels for very long time. Since very long ago, I suggested some practical mid-level theory solutions to this crucial problem, Two Euros (Seuro and Neuro), rather than having One Euro for the whole EU. No matter how much resources we spend on understanding and perfecting bank competition or Brussels bureaucracy, this will not remove the more fundamental problems of the Optimum Currency Area (OCA) that EZ is manifestly not! The United States of Europe or the Canadian federal model is a pie in the sky and will remain so for a very long time! Even more fundamental are the so called structural problems, no time here to talk about them. If we still go up the level of theoretical abstraction, then I fault our understanding of economic science whose models so far abstracted from banking systems (financial inter-mediation) as if banks were not subject to the overarching principal-agent problem, for example. If anything, this line of research is much more relevant to NAFTA/USMCA countries where the nature of bank competition and regulation is indeed a distinguishing feature between success and failure. Contrast over 8000 US banks that are subject to recurring crises: S and L, 2007-8, etc., with some dozen or so Canadian banks that are subject to much better macro-prudential regulation and basically operate according to The Utilities Model. Canada fared best in the world during the very instructional 2007-8 Great Financial Crisis and since. So I suggest that it is this experiential and comparative learning that can provide us with really important clues on how to structure the future of macro-prudential regulation in this global and increasingly digital economy of ours. END OF PROPOSAL SUMMARY, by V. Samonis.

Eurozonos kolapsas neišvengiamas, jeigu nebus įvestos mano seniai siūlomos reformos, būtent Neuro ir Seuro.

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