EU economy bound to crack warns former MEP in single currency swipe

Lance Forman warns European economy ‘bound to crack’

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Weighted down by high inflation and soaring energy costs the European Union’s economy looks to be heading for a deep recession. Grim economic forecasts for 2023 have led some to warn about the future survival of the EU single currency. Former Brexit Party MEP Lance Forman has been a consistent critic of Europe’s economic model and is now certain the entire Eurozone is “bound to crack at some point.”

Mr Forman told “I think there is a problem brewing with the single currency, you cannot have economies that grow and shrink at different rates and one currency that basically covers all of them.

“The thing is bound to crack at one point, and I don’t know when that is going to happen but it is going to happen.

“The problem is if you don’t have the flexibility of floating exchange rates the only way to keep a huge economy like the European economy in balance is by having transfers of wealth from the rich to the poor.

“If you imagine a seesaw which has a pivot, the pivot is the floating currency and if one side gets heavier than the other side because they have been eating too many cream cakes, the way you keep it in balance is either you move the pivot, in other words, the flexible exchange rate.

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“Or you transfer some of the weight from the heavier one to the lighter one to keep the thing in balance.”

The salmon entrepreneur continued: “That is essentially what you have got with the European economy, and because the pivot has been fixed and glued in place because you have one currency and you don’t have all these flexible currencies the only way to keep it in balance is to have massive transfers of wealth.

“If Germany who has been the major funder for Europe has to keep funding other parts of Europe when Germany itself is in crisis which it is now, you are going to have massive resentment building up.

“And massive resentment leads to extremism and extremism leads to chaos, and potentially to war.”

EU could 'lose monopoly and euro as single currency' says expert

EU ministers and leaders have been struggling to agree on a way to contain natural gas prices and help their people cope with inflation.

Around 15 EU states, including Greece, want an EU-wide price cap, citing the inflationary pressure that recent gas price spikes unleashed on their economies.

Economic powerhouse Germany leads a small group of states opposed to price caps.

German Chancellor Olaf Scholz has promised “solidarity” with EU members struggling under soaring energy costs ahead of a visit to Athens.

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In an interview with the Greek newspaper Ta Nea, Chancellor Scholz said: “Europe as a whole is suffering from the high prices of natural gas and I am convinced we can overcome the crisis only with solidarity.”

Relations between Berlin and Athens have recovered since the 2009 Greek debt crisis forced Athens to sign up to three international bailouts on tough and unpopular austerity terms, many at Germany’s behest.

Greece’s economy has slowly rebounded following the last bailout in 2018, though early hopes for strong economic growth were dashed by the COVID-19 pandemic, followed by the energy crisis that is currently gripping Europe.

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