- Political instability arising from European states’ crippling debt burdens may lead to the Eurozone’s implosion, ex-Bank of England (BoE) governor Mervyn King has said.
- The former central banker and staunch Euroskeptic made the prediction in his latest book, The End of Alchemy: Banking, the Global Economy and the Future of Money.
- The newly published work, which is being serialized in the Telegraph, calls for tighter Eurozone integration and significant debt write-offs for Europe’s most austerity-stricken states. However, it also acknowledges such a policy path is dependent on stronger EU states’ willingness to bail out their debt-shackled neighbors.
Ex BOE chief King: “Only a fundamental rethink of how we…organise our system of money and banking will prevent a repetition of the crisis”
— Pieter Cleppe (@pietercleppe) February 28, 2016
- In its pages, King argues Europe’s monetary union has created a “dangerous” cocktail of conflicts between bureaucratic EU elites and sovereign states.
- He predicts that peripheral EU nations will grow weary of the effort needed to sustain membership of the Eurozone, despite the fact an exit could breed chaos and plummeting living standards.
- “If the alternative is crushing austerity, continuing mass unemployment, and no end in sight to the burden of debt, then leaving the euro area may be the only way to plot a route back to economic growth and full employment,” he says.
- King was BoE chief when the credit crunch hit Britain in 2007, leading to the implosion of Northern Rock and other British lenders. He has been slated by critics for failing to predict the global financial crisis.