Barry Eichengreen on the Euro
The euro area has shiny coins, elegant bank notes and a tolerably good central bank, but lacks the other elements of a working monetary union, from common bank regulation and resolution to fiscal and political integration. The idea was that the missing elements would be added gradually, over a period of decades. Inconveniently, Europe was then sideswiped – to stick with the car-crash metaphor – by the global financial crisis. As a result, a process that was designed to be completed over a period of decades was forcibly telescoped into a few years.
.. for the Germans a European project was the only way to fill “the void opened up in German public life by the evisceration of German nationalism”.
.. But the last decade would also have been very difficult for Europe without the euro. There would have been chaos in foreign exchange markets after 9/11, after the Madrid train bombings, and after Lehman Brothers. Things may have gone badly for the euro in the last four years, but they might have gone even worse for Europe in its absence.