Why the single currency has dropped off the Lib Dem's agenda

Press quote (The Guardian)
20 September 2010

Simon Tilford, the chief economist at the CER, thinks similarly [current policy and regime in the eurozone is unsustainable]. Another supporter of the idea of a single currency, Tilford published a scathing critique last week of the current state of the eurozone, warning that it could easily break up. Like Flassbeck, Tilford is concerned about the deflationary bias of policy. "The eurozone can only avoid permanent crisis by convincing investors that growth will be strong enough for the hard-hit members of the currency union to service their debts," he said. "As things stand, it is hard to see how they can grow their way out of trouble. They need a big external stimulus to offset budget cuts and falls in real wages at home: their exports need to grow faster than their imports for a lengthy period." Tilford believes Europe needs a much higher degree of political and economic integration but is unlikely to get it. He is almost certainly right. There is no appetite for it in Europe's capitals and no appetite for it among voters.