Martin Feldstein, "A rapid fall in the euro can save Spain" (Financial Times):
"I believe now, as I did 20 years ago, that imposing a single currency on a heterogeneous group of countries is a mistake. Europe lacks the kind of geographic mobility and automatic transfers from rich to poor states that allow the US to operate with a single currency. But while the creation of the eurozone was an economic mistake, allowing it to dissolve now would be very costly to governments, investors and citizens.
A rescued eurozone would still face the problem inherent in the single currency: an inappropriate monetary policy in different countries at different times. But the other problems of the euro may not continue. The bond markets will prevent the excess borrowing by governments and private individuals that occurred in the past decade. And the peripheral countries are beginning to take the necessary reform steps that could reduce the differences in productivity and unit labour costs that have contributed to widening trade deficits.
A new start for the euro is still well worth trying."
