The euro has been a failure. The single currency has failed to deliver economic stability or a greater sense of a European identity. Martin Wolf
It has become a source of discord.
The story of Italy is revealing and, given its size, of crucial importance.
All of this was predicted.
In his excellent EuroTragedy, Princeton University’s Ashoka Mody cites a critique of the 1970 Werner Committee report, the first blueprint for a monetary union, by Nicholas Kaldor, a British economist of Hungarian origin.
Kaldor argued there would need to be fiscal transfers. That would require a political union.
But the conflicts created by the currency union would fester, making moves towards such a union more difficult. So it has proved.
Martin Wolf FT 19 June 2018
The story of Italy is revealing and, given its size, of crucial importance.
All of this was predicted.
In his excellent EuroTragedy, Princeton University’s Ashoka Mody cites a critique of the 1970 Werner Committee report, the first blueprint for a monetary union, by Nicholas Kaldor, a British economist of Hungarian origin.
Kaldor argued there would need to be fiscal transfers. That would require a political union.
But the conflicts created by the currency union would fester, making moves towards such a union more difficult. So it has proved.
Martin Wolf FT 19 June 2018
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