Formulação da pergunta por Júlio Marques Mota

À pergunta formulada

Eis pois a questão que levanto aqui e agora,  uma vez que Portugal se recusa viver em autarcia como um país pequeno que é,   uma vez que a saída da zona euro unilateral é também ela inaceitável, uma vez que a saída apoiada pela UE é, por seu lado, impraticável, e tendo ainda em conta o conjunto,  caracterizado pela ignorância, ganância e maldade,  destes que nos governam,  seja  a nível regional seja  a nível nacional, então o que fazer para não se morrer, mesmo que lentamente (!)  com estas políticas que estão e estão mesmo para durar e  talvez mais de dez anos, de acordo com as declarações de Jens Weidmann ao Wall Street Journal 

continuemos a ver a troca de pontos de vistas havida com Domenico Mario Nuti

À publicação da versão inglesa do texto, seguir-se-à a versão em português e, por fim, a versão em italiano.

The Euroarea: Premature, Diminished, Divergent

By D. Mario NUTI, Professor Emeritus, Sapienza University of Rome, dmarionuti@gmail.comWebsite  Blog “Transition”:

Domenico Mario Nuti
Domenico Mario Nuti

Parte IV


5. What now?

The missing integration stages and the missing institutions could be filled in, and convergence promoted more seriously and vigorously than in the past.  It is not clear whether all this could be done far enough and fast enough to resolve the current crisis, but this is unknown and is not a good reason not to try.  Or the Euroarea – as it is being suggested with increasing frequency – should and will split into its member countries, or possibly into a Nordic and a Southern currency areas with different common currencies (it has even been suggested that the two currencies might still be managed by the ECB with different targets and policies).

By exiting the Euroarea and restoring a national currency, a country would be able to conduct its own monetary policy, presumably reflating its economy and choosing its own desired trade-off between inflation and unemployment. It could, if it wished, choose a Central Bank template still independent but also able to fund government expenditure (like the Bank of England), except that this might not be much use seeing that even by exiting EMU a country, as long as it still remained in the EU would have to adopt austerity policies, imposed on all EU members by the so-called Growth and Stability Pact.

The exiting country could restore international competitiveness via nominal devaluation of its currency, instead of having to do it via painful and unpopular internal deflationary policies of wage and prices. And it could default – unilaterally or by agreement with its creditors – and bail-in creditors thus reducing its debt, as it could if even it remained a member but without having to agree with the Troika (EC, ECB, IMF) the terms of the bail-in and without ECB and EC (but possibly still with IMF) assistance.  Of course, EMU membership remaining one of the requirements of EU membership, a country leaving the Euroarea would sooner or later, if not at once, have to leave the EU – a non negligible cost of Euro exit.

Exit from the Euro might be forced onto a country by a bank run, in conditions in which the ECB cannot guarantee emergency liquidity assistance: such situation was approached in Cyprus in 2013 when the government initially failed to agree on the terms imposed by the Troika for bailing-in its banks.  At that point the only way to maintain liquidity would be the introduction – by the National Bank or the Treasury – of a national currency, say a National Euro, initially issued at par with the Euro.  Subsequently the new national currency would inflate and devalue, for it would have to float so that the euro does not disappear from circulation due to Gresham’s law.  Indeed the new national currency would probably inflate and devalue at shockingly high rates.  Interest rates in the new currency as a result would increase fast relatively to those of the euro.  Euro exit by several small or just one large country would probably trigger off a run on the banks of other weak Euroarea members and unleash an unnecessary domino effect.

If and when the new national currency regained parity between its floating rate and the rate at which it had been originally issued against the euro, the operation could be reversed: the country could re-join the Euroarea and the National Euro converted back into Euros.  Until then Euro cash would become foreign exchange in the hands of households and companies, current accounts and all debt and credits would be converted into the new currency at par, which by itself would reduce the size of all debt.  International debt technically would remain nominally denominated in Euro or other foreign currencies (at least for the greater part of debt incurred under English Law), but creditors would have to resign themselves to debtors’ default and to de facto bail-in.  Devaluation would improve competitiveness if it was real (nominal devaluation not being offset by higher inflation) and sufficiently large.

Frequently there have been suggestions that the new national currency should not replace the Euro but circulate in parallel with it.  Unfortunately there are no miracles in economics, a parallel currency would be a messy and doubtful solution.  Considering that internal devaluation and default are options even within the Euro, and that fiscal discipline remains one of the obligations of EU membership even for a country exiting the Euroarea the only advantage of leaving the Euro would be greater freedom to default, at the cost of losing some European support by the EU and the ECB, but still subject to both assistance and conditionality by the IMF.

In conclusion there would not be much of a net gain from Euroarea exit, especially considering that exit with default would bar a country from access to international markets for longer (up to twenty years or so) than orderly default and bail-in as in the cases of Greece, Ireland or Cyprus.

As for Germany (and possibly other Nordic countries) leaving the Euro, as recently suggested by George Soros, their exit probably grossly under-estimates German losses from revaluation of the Nordic vis-à-vis a hypothetical Southern Euro.



Para ler a parte III deste trabalho, publicado ontem em A Viagem dos Argonautas, vá a:

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