Dear Mr Wolf,
I have been reading you for years, but I was surprised yesterday by your pessimism on the future of Europe and the Euro (Why the euro crisis is not yet over, Financial Times). Europe is not for many Europeans a bad marriage, on the contrary an example of integration and multilateralism to which many countries in Latin America, Asia and Africa look for inspiration. You say that many countries would not marry again, if they were given the chance. On what basis can you make such a statement? Are you sure Germany would be better off outside? To many Europeans, Germany appears as the country that has gained most from the Euro. In the ’90s, Germany run often a deficit in the current account of the bop. Italy often run a surplus. Today Germany has the highest surplus in the current account, higher than China, 6% of GDP, too much even for the German economy. The Netherlands have a stratosferic, unhealthy surplus equal to 9% of GDP. Britain, as you know, has the highest deficit in Europe. Real wages and incomes have not been repressed in Germany. They are today the highest in the world and they could (according to some should) be upped even more, with positive consequences for German workers and consumers and for the rest of Europe as a whole.
As for the public debt, on the whole the Eurozone has a lower debt/GDP ratio than the US or the UK. There is no need for future write-offs (except for Greece, perhaps). As for Italy are you sure that the Italian bop improvement is due only to the recession and diminished consumption? Italy has 45000 manufacturing exporting companies which in 2012 have exported goods for 260 billion euros, with a trade surplus in goods of 94 billion. In the world only China, Germany, Japan and South Korea do better. The rise between 2010 and 2012 was 10.9%, according to the very reliable Italian statistics office, ISTAT.
And, finally, why do you think that the banking union looks quite remote? If I understand correctly the banking union should be in place by mid-2014. The BCE is hiring 2000 people to staff the SSM, the supervisory mechanism. The bank resolution directive and the relative Authority is being now discussed, together with the common bank deposit scheme.
Moreover, we all know that the game about the structure of the new European architecture, which should lead to a European Treasury, Eurobonds and federal taxation, will start seriously only after the next European elections, which should also elect for the first time the new President of the Commission, which we hope will be more daring than Barroso. Even Italy, which will run the Presidency of the European Council in the second half of 2014, the crucial time for Europe, is producing some ideas. If you want to know what we Italians think about the future of Europe, I would be very pleased to send you a small book “A Brief History of the Future of the United States of Europe”, which will be published on march, 14. An English version will be available in ebook.