A future European Monetary Union (EMU) will aggravate existing mass unemployment produced in part by conditions for its emergence that are too rigidly focused on low deficits and inflation. MIT professor Rudi Dornbush terms the EMU a "bad idea" and notes that its fixed exchange rates require flexible wages and functioning labor markets, neither of which Europe has. The demanding nature of the Maastricht criteria for admission to EMU "is adding to an already mismanaged Europe," according to Dornbush; he foresees that a political push in Germany and France will bring the EMU into being at the cost of economic slowdown and public disenchantment.

Soros, George. CAN EUROPE WORK? A PLAN TO RESCUE THE UNION (Foreign Affairs, vol. 75, no. 5, September/October 1996, pp. 8-14)

"The economy is too important to leave to central bankers." With that assertion, philanthropist-financier George Soros charges that the economic convergence criteria of Maastricht are forcing member governments to accept 18 million unemployed in order to launch the monetary union in 1997. This rigid bureaucratic emphasis could result in a common European currency so resented that member peoples reject it and other aspects of the European Union. Decisions must now be entrusted to the people's voice via a constitutional assembly and taken away from the Inter-Governmental Conference backed by bankers and bureaucrats intent on the Maastricht terms, Soros asserts.

Ross, Robert S.; Mastel, Greg. DEBATE: CHINA AND THE WTO -- ENTER THE DRAGON and CHINA AT BAY (Foreign Policy, no. 104, Fall 1996, pp. 18-35)

In back-to-back articles, Robert S. Ross, professor of political science at Boston College, and Greg Mastel, vice president of the Economic Strategy Institute, agree that China should be incorporated into the World Trade Organization "so that its behavior reinforces the contemporary trend toward trade liberalization." They disagree, however, on whether the United States should press for immediate Chinese entry. Ross argues that it is in the U.S. interest for the WTO to negotiate Chinese admission even though it maintains "the protectionist measures that Indonesia, Japan, South Korea, and Taiwan employed to assist their nascent industrial systems prior to liberalization." Ross believes China will be more susceptible to international pressure for liberalization once inside the WTO. Mastel, on the other hand, calls for a three-part transitional arrangement, similar to the approach used with Poland and more recently as part of the effort to open agricultural markets worldwide, in which China agrees to accept WTO discipline by a fixed date, WTO members retain the right to unilaterally retaliate against China during the transition, and China permits an increasing percentage of imports each year.

Gordon, Bernard K. TRADE BLOCKED (The National Interest, no. 45, Fall 1996, pp. 71-79)

Bernard K. Gordon of the University of New Hampshire argues that the U.S. push to create a hemisphere-wide Free Trade Area of the Americas is "fundamentally incompatible" with U.S. economic and security interests. This push for "regionalism" ignores the fact that the United States is a "uniquely tripolar exporter," splitting its exports about evenly between Europe, the Pacific, and Canada and Mexico. South and Central America play a small role in U.S. exports. Economic regionalism is likely to create "a world America never wanted," Gordon says.

Edmunds, John C. SECURITIES: THE NEW WORLD WEALTH MACHINE (Foreign Policy, no. 104, Fall 1996, pp. 118-133)

Securitization launches a new economic age in which a state can increase wealth directly by increasing the market value of its stock of productive assets. The issuance of high-quality bonds and stocks limits a government's ability to run deficits, tolerate inflation, or overvalue its currency. Rather, there is an immediate and huge payoff for cutting inflation if a significant portion of the capital stock is securitized and global market liberalization is enhanced.

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