Brussels: EU banks are stuck in a loop with the introduction of the euro, the bloc's currency, economist Professor David Blake said the current situation also means that Germany owes more than £ 950 billion that it will never be able to repay, and Italy and Spain owes hundreds of billions, which they will never be able to pay.
Professor Blake believes that there are serious questions about whether the euro will survive in the long run:
“There was very little fanfare when it celebrated its 20th birthday. birthday a little over a year ago. This should come as no surprise as it was a disaster from the start".
He explained: "Different business cycles in the eurozone, coupled with low labor and capital market flexibility, mean that systematic trade surpluses and trade deficits will accumulate because inter-regional exchange rates can no longer be changed."
Before 1999, if Italy had a trade deficit with Germany, the lira would fall in value against the deutsche mark, and this would help eliminate the deficit.
Since all eurozone countries use the euro, surplus regions must feed surplus back to deficit regions via fiscal transfers to maintain the balance of the eurozone economy, as is the case in the UK.