A disastrous failure at the EU summit

Interesting analysis: private capital (savings) was intermediated by the banks from Germany and Holland to the capital-importing countries (Greece, Ireland, Portugal, Spain). After the crisis, the flows stopped. Eliminating structural deficits in the capital importers is only possible with prolonged recessions or huge improvements in relative competitiveness. Since the capital exporters are unlikely to become less competitive, long-term structural recessions in vulnerable countries are the likely outcome. Will this be tolerated, to save the Euro?  Read the full article in the Financial Times here.

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