There Is No Eurozone Exit Strategy

I have often referred to the macroeconomic illiteracy of the eurozone economic policy establishment. Equally, if not more irritating is the political and legal illiteracy of economists who deal with eurozone issues. This year’s Wolfson economics prize is a celebration of the latter type.

The question posed by the Wolfson prize committee is: “If member states leave the economic and monetary union, what is the best way for the economic process to be managed to provide the soundest foundation for the future growth and prosperity of the current membership?”

The question makes two implicit assumptions. The first is whether the posed condition is possible, for otherwise the question makes no sense. The second assumption is one of existence. If you ask: what is the best way, you assume that such a way must exist.