Crisis proves the case for convergence

摘要

Who wants to converge with western Europe? Greek sovereign finances are threatening eurozone cohesion, a euro-denominated credit boom in central and eastern Europe (CEE) spiralled out of control, protests on the streets have brought down several CEE governments. Transitional Europe has lost faith in transition, say doom-mongers. But the facts do not fit the gloomy story, and we should be wary of learning the wrong lessons. Yes, nearly 20 banks in Ukraine have entered administration, along with three defaults in Kazakhstan and anotherrnhalf-dozen rescue efforts in Russia. But the surge in retail credit during the boom years, characterised as too far too fast, does not appear to be the cause of any catastrophe.