Hugo Dixon of Reuters Breaking Views predicts a European Union (EU) financial disaster is still possible, but a more likely development is one where the EU experiences an extended period of zero or negative growth. Dixon argues there is no silver bullet; the situation has unraveled too much for politicians to save it with fiscal reform, and breaking up the EU would be a disaster in itself. The worst thing that could happen, Dixon says, is for the EU to shift toward protectionism in an effort to stimulate its economy, but he does not expect this to happen. For more on this continue reading the following article from Tim Iacono.
Those whose hopes of a much bigger crisis in Europe are about to be dashed after the final approval of the EFSF bailout fund by Slovakia can take heart in this view from Reuters Breaking Views founder Hugo Dixon that the chance of a “total disaster” still exists.
Muddling through with years of zero or negative growth is now seen as the most likely scenario, an outlook that, some time ago, would have been considered a disappointment, but, after the events of the last few months, seems much less of one now.This blog post was republished with permission from Tim Iacono.