The one liner that got me interested was: "Mr. Lee thinks European leaders will try very hard to prevent the collapse of their currency union but he does not believe they will be able to keep it going." So, does he think that the eurozone will ultimately dissolve?
Searching the internet, I found a website with the details:
... European leaders will try to save the euro zone from collapse, because a collapse of the currency union would be “an admission that their aspiration for one Europe is not achievable”.
“A fundamental problem of the euro is that everybody, every European country, march to the same drummer whereas each country has its own tempo and you cannot expect the Greeks to march like the Germans, so the problem will not go away”.
Therefore, he added, “a two-tier Europe or even a three-tier Europe is possible but a one-tier Europe with different spending habits, thrift habits and discipline is too difficult to achieve”.
The euro came into existence in 1999 with the aim of increasing economic cooperation and growth in Europe, and upping Europe’s presence on the world stage.
With the recent debt crises, the currency union forces other European countries to bail out troubled members and policymakers are denied the flexibility of monetary policy as a tool to fight recession.
Read articles: here and here.
So, will the eurozone go the way of the Dodo? If it will, when will it happen?
Your guess is as good as mine.
One thing is for sure, Mr. Lee Kuan Yew has spoken and I will take note.
Seven eurozone countries had their ratings confirmed while nine were downgraded by S&P on 13 Jan (Friday). It downgraded France's top AAA rating by one notch to AA+, with a negative outlook while Italy went down by two notches to BBB+, negative outlook, and Spain was also down two notches to A, negative outlook.
Read article: here.
Updated on 25 June 2016: Prime Minister David Cameron is to step down by October after the UK voted to leave the European Union. Speaking outside 10 Downing Street, he said "fresh leadership" was needed. The PM had urged the country to vote Remain but was defeated by 52% to 48% despite London, Scotland and Northern Ireland backing staying in. (Source: BBC)
Stakeholders should worry as credit is tightening.