by Monica Dorhoi
Often times I am asked to explain my economic thinking on how to fix the world economy.
Few minutes ago I was reading a headline from Fortune from October 10, 2016 where the headline said everything “Jamie Dimon Thinks the Euro Is Doomed”
I could not say enough to contract it.
A day earlier I attended the meeting of the Euro50 group held in Washington DC during a major annual banking convention. I could not disagree more with Mr. Jamie Dimon as my former mentor Andrew Crockett would too.
Impressive and challenging to the audience as topic was, the reponse was up to par. Notable are the comments of Paul Tucker, the former Deputy Central Banker of the Bank of England now professor at Harvard University.
“Without a doubt” Tucker stated that “the Brexit is an adverse event and is the greatest recorded threat in the economic integration.” The also stressed that the “Capital markets integration is not working”.
On the future of the European integration
“Without a doubt, it is clear that Turkey will never be allowed in the European Union” Tucker also stated, “in spite of the numerous reactions.”
On the European legal system as obstacle to the Euro
Tucker repeatedly stressed that the European Union rule of the Supreme Court is the European Court of Justice and is not accepted in UK. The decisions of UK are made by judges and not by panels of jurors and UK will never be able to accept the European Court of Justice.
He clearly spelled out how the Bank of England plans to mange its currency and if the so-called Brexit negative influences were to come into play, they will be dealt as part of the original response. Although the different responses were discussed ahead a new relationship UK and EU it is the political uncertainty that dominated the agenda and the downgraded forecast growth rate was lowered from 3.5% and 2%.
The Bank of England to respond accordingly will have to craft a new relation UK and EU, where the EU as the common framework will not be a viable option.
To the extent EU-UK comes into play the harmonization of the system is essential even going forward for a successful Euro currency.
Euro50group and CIGI breakfast meeting
The Eurozone after Brexit
Washington DC, Sunday, October 9, 2016
Willard continental -Willard room
Introductory remarks Edmond Alphandery Chairman of the Euro50 Group
Nouriel Roubini, Professor of Economics at Stern School, NYU
Chairman of Roubini Macro associates
Philip Lane, governor, central bank of Ireland
Paul Tucker, Chair, systemic risk council, harvard university, former deputy governor of Bank of England
Rene karsenti, president, International Capital Market Association
Athanasios Orphanides, professor of global economics, MIT Sloan school of management; former governor of Central Bank of Cyprus
Mahmoud pradhan, Deputy Director, European Department, IMF
Dominico Siniscalco, Vice President and Managing Director, Morgan Stanley, former minister of economy and finance of Italy
Nicolas VERON, senior fellow, Bruegel, visiting fellow, Peterson institute for International Economics