Europe’s Monetary (Dis)Union
Europe's Progress Toward Economic Integration
New Opportunities and New Challenges
Euro Fantasies: Common Currency as Panacea
The Case for EMU: More than Money
EMU and International Conflict
The Dollar and the Euro
The Degeneration of EMU
The Future of the Euro
Why the Greek Crisis Will Not Ruin Europe’s Monetary Union
The Failure of the Euro
The Little Currency That Couldn’t
The Crisis of Europe
How the Union Came Together and Why It’s Falling Apart
Can Europe’s Divided House Stand?
Separating Fiscal and Monetary Union
Saving the Euro Will Mean Worse Trouble for Europe
Charting the Disastrous Choices Ahead
Can the Eurozone Be Saved?
Yes, but the EU Summit Was Too Little, Too Late
How to Save the Euro -- and the EU
Reading Keynes in Brussels
Why Only Germany Can Fix the Euro
Reading Kindleberger in Berlin
The Myth of German Hegemony
Why Berlin Can't Save Europe Alone
Europe's Optional Catastrophe
The Fate of the Monetary Union Lies in Germany’s Hands
Why the Euro Will Survive
Completing the Continent’s Half-Built House
Avoiding the Next Eurozone Crisis
How to Build an EU that Works
Europe After the Crisis
How to Sustain a Common Currency
Europe's New Normal
It's Here, It's Unclear, Get Used to It
So Long, Austerity?
Syriza's Victory and the Future of the Eurozone
Austerity vs. Democracy in Greece
Europe Crosses the Rubicon
Why Greece Will Cave—and How
Alexis Tsipras and the Debt Negotiations
Why Greece and Europe Will Still Stay Attached
How to Contain Athens' Economic Problems
A Pain in the Athens
Why Greece Isn't to Blame for the Crisis
The Agreekment That Could Break Europe
Euroskeptics, Eurocritics, and Life After the Bailout
MONNET WAS MISTAKEN
To most Americans, European economic and monetary union seems like an obscure financial undertaking of no relevance to the United States. That perception is far from correct. If EMU does come into existence, as now seems increasingly likely, it will change the political character of Europe in ways that could lead to conflicts in Europe and confrontations with the United States.
The immediate effects of EMU would be to replace the individual national currencies of the participating countries in 2002 with a single currency, the euro, and to shift responsibility for monetary policy from the national central banks to a new European Central Bank (ECB). But the more fundamental long-term effect of adopting a single currency would be the creation of a political union, a European federal state with responsibility for a Europe-wide foreign and security policy as well as for what are now domestic economic and social policies. While the individual governments and key political figures differ in their reasons for wanting a political union, there is no doubt that the real rationale for EMU is political and not economic. Indeed, the adverse economic effects of a single currency on unemployment and inflation would outweigh any gains from facilitating trade and capital flows among the EMU members.
The 1992 Maastricht Treaty that created the EMU calls explicitly for the evolution to a future political union. But even without that specific treaty language, the shift to a single currency would be a dramatic and irreversible step toward that goal. There is no sizable country anywhere in the world that does not have its own currency. A national currency is both a symbol of sovereignty and the key to the pursuit of an independent monetary and budget policy. The tentative decision of the 15 European Union (EU) member states (with the exceptions of Denmark and the United Kingdom), embodied in the Maastricht Treaty, to abandon their national currencies for the euro is therefore a decision of fundamental political significance.
For many Europeans,
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