Tuesday, May 9, 2017

What Macron Should Do First

The newly elected French President, Emmanuel Macron, should begin immediately to unwind the European Union's bailout policy for profligate members.  If that isn't done the European Union has no hope of survival.  The EU may have little or no hope anyway, since EU member country debt levels have exploded beyond sustainable levels.

The Greek bailouts are symbolic of an arrogance and a lack of understanding of simple economics that permeates officialdom in the EU.  As long as the EU provides a bailout apparatus, two conclusions follow automatically: 1) There is no incentive for member states to behave in a fiscally sensible manner, since bad behavior is rewarded by a bailout mechanism; 2) Sovereign debt levels will continue to increase with no limits until ultimate disaster occurs.

It is unlikely that Macron will bring sanity to the EU, but hope springs eternal.

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