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Funny Money
Like it or not, today the euro is a fact of life — and the impressive David Marsh has turned its history into a page-turner.
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Today the global financial and economic crisis is stress-testing the euro as never before in its brief existence. Increasingly divergent rates of inflation, debt, and unemployment among its 16 users are painfully pressuring its Achilles’ heel, the one-size-fits- all monetary policy. Informed speculation is rife that one or more of Euroland’s debt-laden members like Italy, Greece, Portugal, Ireland, or Spain could default, with a catastrophic domino effect throughout the area. Such an event would bear out the skepticism of economists like Nobel Prize winner Milton Friedman and Harvard’s Martin Feldstein, both of whom early questioned the validity of a money based on politics.
In this masterful study of the euro, David Marsh is suitably Delphic in summing up its future prospects. He admits that “the euro will face the danger of fragmentation, with either strong or weak countries separating from the system” to recover more workable forms of national currency management. But he concludes prudently that it’s too early to say whether the 10-year-old experiment will end in success or failure.
Fair enough. But the bet here is that the euro will continue to exist whatever happens. Here’s why: to qualify for Euroland, EU states met stringent “convergence criteria” by notoriously manipulating statistics, cooking the books, and other creative accounting. And you may be sure that having invested this much political capital in it, the EU will fudge the figures, bend the rules, and do whatever else necessary behind closed doors to ensure the euro’s survival. That, after all, is how “Europe” works.
About the Author
Joseph A. Harriss is The American Spectator’s Paris correspondent. His latest book, An American Spectator in Paris, was released this fall.
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Aaron| 5.4.09 @ 9:54AM
I love taking a handful of Euros to my local small town bank for deposit, I get the same look from the teller that I get from my dog when he needs to go do his "business" (head cocked to the left, slightly worried).
Pingback| 5.4.09 @ 11:57AM
The American Spectator : Funny Money | Money Blog : 10 Dollars : Money Articles. links to this page. Here’s an excerpt:
Nils| 5.4.09 @ 7:35PM
I actually like the Euro, and I am not alone. This article only states its disadvantages, without mentioning its advantages.
Nils| 5.4.09 @ 9:22PM
My partner likes the Euro too.
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Topics about Espresso | Funny Money links to this page. Here’s an excerpt:
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Topics about Buckingham-palace | Funny Money links to this page. Here’s an excerpt:
Francis| 5.6.09 @ 8:27PM
What you write is brilliant, the FED should act a bit more the way you suggest : switch the EUR/USD swaps of the FED to GBP/USD swaps for example.
Send quickly back any such bad money from the dollar heaven.
When in the States I appreciate the new value of your houses, enterprises and other assets moreover when backed by a great dollar policy.
I am not an expert and happy to understand your expertise and mostly to share it.
So, my friend, I am confident about the future.
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Joann | 6.1.11 @ 11:31PM
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Ron S. | 5.12.12 @ 8:03AM
I love the satirical approach how this article begins with before getting serious. Many say the Euro single currency will fail, I side with that as well. 17 Eu nations, each with a different approach in how they do things cannot seem to go well with the common currency.
What's left to be seen is how the Greek exit will play out.