Insight: Ideas for Change Episode 3: Niall Ferguson - More Europe (World Economic Forum)
Niall Ferguson is surprised by how little anti-European sentiment there is within Europe. The preferre
d solution for many is More Europe; Ferguson unpacks the true implications of this idea.
More Europe, Ferguson argues, implies a federal system and the accom- panying issue of eurobonds, with full faith and credit of all member govern- ments. 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?
