EURO AT THE TURNING POINT

"The Commission would of course have preferred an outcome closer to its original proposal" said President of the European Commission José Manuel Barroso" adding however that the deal "can still be an important catalyst for growth and jobs".

This welcome agreement on the intra-union funding hides some bitter end.

Discordant opinions about the horizon of the Euro Zone (EZ) are growing all around Europe . For example, prof. Paolo Manasse, University of Bologna, expressed his criticism [read article] by arguing that the transfer of funds, which are necessary to keep on the EZ, is too huge.

The french economist Jacqes Sapir estimates that this transfer intra EZ amounts to 257 billion of euro !! But this amount does not include the ordinary intra-area transfer. In other terms, it sounds economically and politically not sustainable

 [read article].   

The spanish economist Julián Pavón (Catedrático - Director de CEPADE, Madrid) explains clearly the "schizofrenia" of the EZ: in front of the EZ crisis which is characterized by the depression of the global demand, the opportune actions should be adressed to increase the final consumption and/orthe investments and/or the public expenditure and/or the net export. But the current politics of deflation which the EZ countries have adopted are driving to the "wrong" direction. Instead of facilitating the convergence of the macroeconomic parameters among the EZ countries, they are reinforcing the disruptive forces.

"Since the it is not feasible to  sustain the countries which are in deep water by means of robust transfer of funds, then it is time to wonder if it is better for the heterogeneous countries of the EZ to walk apart." This is by the end the opinion of another italian economist which stands out from the crowd, prof. Alberto Bagnai, University of Pescara and researcher at the Centre de Recherche en Economie Appliquée à la Mondialisation (CREAM), University of Rouen (France).