Mats Persson: “The EU economy is stagnant”

Mats Persson, Director of London think tank Open Europe, gave a talk 12 November on European integration, invited by RNH, the Institute of International Affairs at the University of Iceland and the Icelandic website Evropean Watch. Persson pointed out that the EU faced both political, economic and monetary crises. He argued that the authors of the euro project had been far too optimistic about one currency being feasible for different economies. Economic productivity in the PIIGS-countries, Portugal, Italy, Ireland, Greece and Spain, was not as high as in Germany, the Netherlands and Finland. The PIIGS-countries had not lowered domestic costs in the same way as for example Estonia. It was, Persson said, interesting to compare the share of different clusters of states in World GDP: The US and the EU as a whole were slowly reducing their share, whereas the eurozone itself was reducing its share quite rapidly, and the BRICS-countries, Brazil, Russia, India, China and South Africa, were increasing their share. In many eurozone countries the economies were stagnant and unemployment high. The three options available were not good: 1) cost-cutting in the weaker countries and temporary support from the stronger ones; 2) greater centralisation in Brussels; 3) Greece and possibly other countries leaving the eurozone. Morgunbladid published an interview with Persson 12 September, and the same day Icelandic Broadcasting Corporation broadcast an interview with him. Persson’s talk will soon be available on Youtube.

Persson Slides