Euro is a mistake; says Milton Friedman Tuesday, 28 August 2001 12:34

ROME: US economist Milton Friedman was quoted yesterday as saying that the euro is a mistake, in an interview published by the Italian newspaper Corriere della Sera. The daily quoted the Nobel laureate for economics as saying: “I think the euro is a big mistake.” ROME: US economist Milton Friedman was quoted yesterday as saying that the euro is a mistake, in an interview published by the Italian newspaper Corriere della Sera. The daily quoted the Nobel laureate for economics as saying: “I think the euro is a big mistake.”
Asked whether the single European currency would create monetary turbulence, Friedman said he thought it would, because the euro would create discrepancies instead of promoting political unity. The economist mentioned Ireland and Italy as two cases in point.
Ireland, he explained, would need a tighter monetary policy, while Italy probably needs more flexibility. Meanwhile, German economic problems loomed over the entire euro-zone, Friedman added.
If Berlin decided to ease monetary policy to relaunch its economy, it would create tension within the zone, he said. With regard to the global economic decline, Friedman said that US production and employment statistics indicated that the country was already in recession, but that growth would return in 2002.
The Stanford University economics professor also said that the Italian economy must simplify its tax system, and introduce lower tax rates and public spending cuts.

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