….is that it’s been a blessing in disguise for the EU. Before the crisis the Euro was heading towards 1.50, now it is down to a more reasonable 1.35. If Greece defaulted on its debt, it would probably go down to 1.2. Would that be bad for Europe? Most would say no. In a world of competitive devaluations in which China has been amassing $2.4 trillion in reserves thanks to an artificially devalued currency, exporters in the EU would welcome the fall of the Euro. Moreover, the only real danger of a declining currency, inflation, looks very well under control: labor costs are down because of unemployment and energy costs are down because of lack of demand. No wonder it’s taking so long to bail out Greece.

Follow Martin Varsavsky on Twitter: twitter.com/martinvars

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