The Agenda

Kenneth Griffin and Anil Kashyap Call for Restoring the Mark

Restoring the mark is one of the better ideas I’ve heard for improving the health and stability of the eurozone.

Although repeated currency devaluations are not the path to prosperity, a weaker euro would give a boost in competitiveness to all members of the monetary union, including France and the Netherlands, which is why they might very well choose to remain in it even if Germany were to gradually leave. A resurgence of manufacturing would also allow the vast unemployment rolls of Spain, Portugal, Greece and other countries to begin to decline. The tremendous loss of human capital and human dignity we are witnessing would ease.

Reintroducing the mark would not solve the debt burdens of southern European countries, but it would give them needed breathing room to restructure their economies, reform labor markets, collect more taxes and reassure investors. The ability of the southern European countries to service their sovereign debt would immediately improve, helping to end the slow-burning debt and banking crises that have engulfed the Continent since 2008.

German firms have profited from a weak euro, yet there has been a longer-term cost: the appreciation of the mark forced German firms to improve productivity and to move up the value chain; the weak euro, in contrast, has acted as a crutch, delaying the transition from manufacturing to knowledge-intensive services. Many Germans obviously see this as a feature and not a bug, but there is at least some reason to believe that Germany is poorer as a result. Moreover, the fact that Germany has remained roughly fixed on the value chain has putted additional pressure on manufacturers in southern Europe, would would have had an opportunity to fill the gap as Germany climbed the value chain. (Interestingly, Germany has experienced significant gains in hourly productivity, yet per capita productivity has declined as hours have decreased.) 

Reihan Salam — Reihan Salam is executive editor of National Review and a National Review Institute policy fellow.

Most Popular

Film & TV

In Unsane, Aetna Meets Kafka

Unsane doesn’t take the form of a horror film; at first, it appears to be a Hitchcockian thriller about mistaken identity or perhaps getting ensnared in a web of bureaucracy. Yet with clinical detachment it develops into a nerve-flaying story almost too agonizing to endure. Unlike most horror movies, it isn’t ... Read More
Science & Tech

The Real Deal With the Tech Giants

A bit of dialogue from the old television series Person of Interest, where a reclusive billionaire programmer and a former CIA agent use a giant supercomputer to predict crimes and save people: FINCH: Hester's living off the grid. No photos online and nothing on the social networking sites. REESE: I've never ... Read More

Viva l’Italia?

Italy has just had elections, with very interesting results. I wanted to talk with Alberto Mingardi, which I have. He is one of the leading classical liberals in Italy -- the director general of the Bruno Leoni Institute, in Milan. (Mingardi himself is Milanese.) He is also an authority in arts and letters. In ... Read More

Putin and the Cult of Leadership

On Sunday, Russian dictator Vladimir Putin won an unsurprising reelection-campaign victory against Communist Party candidate Pavel Grudinin, by a margin of 76.7 percent to 11.8 percent. The results were unsurprising because Putin is a tyrant who murders or imprisons political rivals, and who isn’t afraid to use ... Read More

Trump and Brexit Derangement Syndrome

I am not one of those Brexiteers who believe that Brexit and Trumpism are essentially the same phenomenon in two different countries. To be sure, they both draw on some of the same political trends, notably a distrust of elites and an upsurge of popular anger over evident failures of public policy such as illegal ... Read More

Stand Up to Putin

President Putin’s landslide victory in Russia’s presidential election was achieved against the lackluster competition of a group of mediocre candidates from which the sole serious opponent had been excluded; amid plausible allegations that his security services had tried to poison two Russians in England by ... Read More