Tags: Ben-Ami | eurozone | Draghi | euro

Author Ben-Ami: Eurozone Must Either 'Integrate' or 'Unwind'

Friday, 12 Jul 2013 08:49 AM

By Dan Weil and David Nelson

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The eurozone must either draw closer together or break apart, says London-based financial journalist Daniel Ben-Ami.

Almost a year ago, European Central Bank (ECB) President Mario Draghi gave a famous speech in which he promised the ECB would do "whatever it takes to preserve the euro."

But "very little has happened" since then to pull the eurozone closer together, Ben-Ami tells Newsmax TV in an exclusive interview. The 17 countries have done little to foster a banking union or fiscal union, for example.

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The countries are in much different places economically, Ben-Ami points out. "You have Germany, the Netherlands, which are overall pretty strong, dynamic economies, very strong exports," he notes.

"Then you have much weaker economies like Greece and Spain tied into the same monetary block. That doesn’t' really work."

So what's the solution?

"Either they have to unwind the whole thing or they have to move forward with some kind of real integration, and they've not really done either," Ben-Ami, author of "Ferraris for All: In Defense of Economic Progress," suggests.

While many European bureaucrats recognize that truth, "they just shrug their shoulders and say, 'Well what can we do? We just have to carry on because there's no alternative.'"

Financial markets might put the kibosh on the euro at some point, Ben-Ami declares.

"Draghi managed to persuade fund managers and other investors that he would do whatever it takes to stabilize things and, so far, they believe him," he explains. "But that belief might disappear at some point in the future. I don’t think we've yet seen the last act of the Eurozone crisis."

So will the euro exist seven years from now?

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"It may well still exist," Ben-Ami states. "But if it exists, it would be at the expense of a lot of the people living in Europe, because it is a completely undemocratic process. ... Also, economically, it's caused all sorts of problems."

Given all the eurozone's woes it may seem surprising that a country like Latvia wants to join. It's slated to do so Jan. 1.

"You can imagine that if you're a small country like Latvia, ... then you are quite weak and vulnerable, so you can see why you might want to be part of a bigger currency bloc," Ben-Ami argues.

Of course a few years ago the eurozone looked attractive to Greece, Portugal and Ireland. But now, "with the benefit of hindsight, it wasn't such a good idea," he contends. "It had lots of problems attached to it. So maybe those Latvian politicians will regret their decision as well."

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