The Euro is Heading for a Permanent State of Depression!

• The euro is heading for a permanent state of depression! 
  by Jeremy Warner, http://www.telegraph.co.uk/
  If the euro survives in its current form, then Mario Draghi, president of the European Central Bank, will surely have earned his place in the history books as one of the chief architects of its salvation.
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  A year ago, monetary union looked as if it was heading for certain death, with the European banking system in apparent meltdown and extreme divergence in monetary conditions across the single currency area. In all but name, monetary union had already ceased to exist.
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  Action by the ECB, first with the cash-for-debt Long Term Refinancing Operation and, more recently, the promise of unlimited bond purchases, has succeeded in stilling the waters, at least to some degree. Even a Greek exit seems, for the time being, to be off the table. With more austerity, Berlin seems minded to give Greeks another chance – until the next bail-out, in any case.
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  But, though the single currency may have been saved from imminent death on the operating table, it seems now to be heading for a scarcely more appetising alternative – a condition of chronic, long-term illness where still very tight monetary conditions in many parts of the eurozone in combination with lockstep austerity threaten to induce a virtually permanent state of depression. Even Germany shows every sign of slipping back into economic contraction.
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  For Britain, still reliant as it is on some sort of a recovery in European trade to see it through its own austerity programme, there could scarcely be a set of circumstances less conducive to long-term recovery than this.
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  New research by Dawn Holland and Jonathan Portes of the National Institute of Economic and Social Research has confirmed what has long been suspected – that co-ordinated fiscal consolidation across many EU countries has not only had a substantially larger negative impact on growth than expected, but has also had the very reverse consequence to the one intended by raising rather than lowering debt-to-GDP ratios.
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