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Insights: Ideas for Change - Niall Ferguson - More Europe


Niall Ferguson is surprised by how little anti-European sentiment there is within Europe. The preferred solution for many is More Europe; Ferguson unpacks the true implications of this idea.

More Europe, Ferguson argues, implies a federal system and the accompanying issue of eurobonds, with full faith and credit of all member governments. What those advocating More Europe fail to acknowledge is that any federal system implies a transfer of resources from the more efficient and productive core to the periphery.

In the case of Germany, Ferguson estimates the cost will be a transfer of up to 8% of GDP per annum for the foreseeable future. With the prospect of a full-blown European banking crisis following a trigger event such as Greek default as the alternative, is it a cost worth paying?