What’s So Special About the Euro Currency Area?

By Caroline Baum – Now that the Greek election failed to solve anything, Europe is back to the same problems it faced before.

I’ve lost count already of all the crises within a crisis since Greece first revealed the true state of its finances almost three years ago. All the summits, one-on-one meetings, academic research and unsolicited advice haven’t done anything to fix the underlying structural problem. Seventeen different countries with 17 sovereign governments, 17 unique cultures and at least 17 languages are ill-suited for a monetary union. more> http://tinyurl.com/cgkvwm9

Related articles

• The Euro Crisis: Why Greece’s Election Doesn’t Matter (business.time.com)
• Europe’s relief from Greek vote likely fleeting (sfgate.com)

Europe After the Crisis

Various Euro bills.
(Photo credit: Wikipedia)

By Andrew Moravcsik – From the start, the euro has rested on a gamble. When European leaders opted for monetary union in 1992, they wagered that European economies would converge toward one another: the deficit-prone countries of southern Europe would adopt German economic standards — lower price inflation and wage growth, more saving, and less spending — and Germany would become a little more like them, by accepting more government and private spending and higher wage and price inflation. This did not occur. Now, with the euro in crisis, the true implications of this gamble are becoming clear.

No country has issued a serious challenge to any of the EU’s core activities. Nor has a single prominent European politician advocated withdrawal from the EU, as that would amount to economic suicide. Brussels continues to manage about ten percent of national policies, from business regulation to European migration, under a unified legal system. The union has recently expanded, from 12 members at the time of the Maastricht Treaty to 27 today, leaving lasting movement toward open markets, democracy, and the rule of law in its wake. more> http://tinyurl.com/cm5plsl

Related articles

• If Greece is to stay in the euro, something’s got to give (guardian.co.uk)

Europe’s Debt Crisis Has Become a German Identity Crisis

By Brendan Greeley – The debt crisis in Europe has become a crisis of German identity. The rising likelihood of a Greek default has left the Continent’s most powerful nation with an unpalatable choice: back away from its insistence on responsibility and monetary stability and agree to help purchase Greece’s sovereign debt; or hold fast and risk the collapse of the euro. To a considerable degree, the future of Europe’s banking system, its monetary union, the fate of the global economy, and Barack Obama’s Presidency now rest on how Germans decide to act. more> http://tinyurl.com/3l4lwse

Related articles

• Barroso slams Franco-German euro govt proposal (seattlepi.com)