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August 04, 2011


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yeah! Welcome back!

20 months to go.

FWIW, I plan to be in Chicago in September 2012.

Doug M.

2012 is still to early, sadly.

Still ... I thought you would point out the argument of the above post suggests you and Omar will win. After all, what seemed like an easy path to de-euroization is not, in fact, easy at all, unless there's a hole in my reasoning.

I tried a rather long answer, but my post was not allowed (length? restrictions?) - so you might look it up at:


Well Im also holding tight on my chair, half around the world I woke up to discover that the Swiss franc reached parity with the Euro (and I just found out that the intervention of the Swiss central bank to lower the value of the CHF will cost us quite a bit as this will translate into cuts for the cantons; the central bank divides its earnings amongst them so we are having the no-tax hikes do spending cuts instead, that might sound familiar to you, down here in Lucerne as well). Still concerning our bet, my main argument is not as much about economics (although as you point out things can turn pretty nasty there too) but about politics. A break-up of the Euro would be such a massive blow to European integration that I find it hard to believe most EU MS representatives would agree to it. There are all sorts of reasons for this, structural (with power slowly shifting towards emerging markets), domestic (with radical right parties ready to capitalise on anti-EU feelings), and maybe even ideological. I think there is a genuine aim of furthering integration (even when Eurosceptics are a growing minority). Even in this island of Euroscepticism that is Switzerland most members of the political elite are supporters of EU integration (not voters of course, otherwise we would be already in). Now, you might say the political costs of rescuing the Euro might become too high. And that might well be the case, I just can't see how Merkel could sell the idea of a Eurobond to the German constitutional court. So for that you need to amend Lisbon, and whether that is possible... well, who knows. European integration however has previously given plenty of surprises (at the time the UK joining the union, or the enlargement to the Eastern and Central European countries seemed impossible) so somehow I believe that as disfunctional as European politics are, the political and economic costs are so high that the Euro will make it to March 2013. And otherwise, well at least the franc will be even more overvalued than it is now (just read this morning that due to the currency crisis, these days Zurich and Geneva are the second and third most expensive cities of the world after Oslo) so the flight (not the meal though) might be relatively cheaper. But then again the Swiss economy might be then about to crash. So I still hope Doug and myself will fly over to visit you in Boston.

And Sarkozy is now talking about a smaller EU.



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