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Economics

To Save Euro, Turn Banks Into Mutual Funds: Laurence Kotlikoff

Sept. 14 (Bloomberg) -- Eleven years ago, economic historian Niall Ferguson and I marked the euro’s birth with a Foreign Affairs article titled “The Degeneration of EMU.” We argued that absent centralized fiscal policy, euro-zone countries would fight over how much money the European Central Bank should print to help pay their bills. We gave the euro a decade.

Tragically, we may end up close to the mark. The euro could collapse this fall unless the ECB commits to printing every last euro needed to keep Greece, Portugal, Ireland, Italy, Spain and Lord knows who else (think Belgium and France) afloat. That’s a tall order.