# Euro

The euro (sign: €; code: EUR) is the official currency of the eurozone, which consists of 18 of the 27 member states of the European Union: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.

## Quotes

* With the euro, that form of pressure has gone.
** Perry Anderson, "Depicting Europe", London Review of Books (20 September 2007)
* Our Union is more than an association of states. It is a new legal order, which is not based on the balance of power between nations but on the free consent of states to share sovereignty. From pooling coal and steel, to abolishing internal borders, from six countries to soon twenty-eight with Croatia joining the family this has been a remarkable European journey which is leading us to an “ever closer Union”. And today one of the most visible symbols of our unity is in everyone’s hands. It is the Euro, the currency of our European Union. We will stand by it.
** José Manuel Barroso, Nobel Peace Prize Lecture of the European Union, 10 December 2012
* The most likely scenario is that EMU (Economic and Monetary Union of the European Union) will occur but will neither end Europe’s currency troubles nor solve its prosperity problems.
** Rudiger Dornbusch, "Euro fantasies", Foreign Affairs, vol. 75, n. 5, p. 113, September/October 1996.
* Once Italy is in, with an appreciated currency, the country will soon be back on the ropes, just as in 1992, when the currency came under attack.
** Rudiger Dornbusch, "Euro fantasies", Foreign Affairs, vol. 75, n. 5, p. 115, September/October 1996.
* The most serious criticism of EMU is that by abandoning exchange rate adjustments it transfers to the labor market the task of adjusting for competitiveness and relative prices... losses in output and employment (and pressure on the European central bank to inflate) will predominate.
** Rudiger Dornbusch, "Euro fantasies", Foreign Affairs, vol. 75, n. 5, p. 120, September/October 1996.
* Italians dream that the ECB (European Central Bank) will make their life easier than the Bundesbank does now... The new central bank is certain to establish itself at the outset as a direct continuation of the German central bank.
** Rudiger Dornbusch, "Euro fantasies", Foreign Affairs, vol. 75, n. 5, p. 121, September/October 1996.
* If there was ever a bad idea, EMU it is.
** Rudiger Dornbusch, "Euro fantasies", Foreign Affairs, vol. 75, n. 5, p. 124, September/October 1996.
* Instead of increasing intra-European harmony and global peace, the shift to EMU and the political integration that would follow it would be more likely to lead to increased conflicts within Europe.
** Martin Feldstein, "EMU and international conflict", Foreign Affairs, vol. 76, n. 6, p. 61, November/December 1997
* Although 50 years of European peace since the end of World War II may augur well for the future, it must be remembered that there were also more than 50 year of peace between the Congress of Vienna and the Franco-Prussian War. Moreover, contrary to the hopes and assumptions of Jean Monnet and other advocates of European integration, the devastating American Civil War shows that a formal political union is no guarantee against an intra-European war.
** Martin Feldstein, "EMU and international conflict", Foreign Affairs, vol. 76, n. 6, p. 62, November/December 1997
* What is clear is that a French aspiration for equality and a German expectation of hegemony are not consistent.
** Martin Feldstein, "EMU and international conflict", Foreign Affairs, vol. 76, n. 6, p. 69, November/December 1997
* A critical feature of the EU(European Union) in general and EMU in particular is that there is no legitimate way for a member to withdraw... The American experience with the secession of the South may contain some lessons about the danger of a treaty or constitution that has no exits.
** Martin Feldstein, "EMU and international conflict", Foreign Affairs, vol. 76, n. 6, p. 72, November/December 1997
* When the Monetary Union was founded in 1992, it was a common understanding among economists that a monetary union of states of very different economic strength could function only if either economic policy was communalized as well or the strong states were willing to pay for the debts of the weaker states. Politicians ignored this warning. The financial crisis showed that the economic experts were right. The Monetary Union deprives the states of a number of fiscal instruments such as revaluation or devaluation of the currency. This contributed to the crisis.
** Dieter Grimm. Europe in Hard Times. A Conversation with Dieter Grimm and Michael Wilkinson (ed.) Leonardo Mellace. Ordines. No 1 – June 2018 p.344
* The fundamental problem of European monetary union lies in its incompleteness or lopsidedness. There was a much better preparation for the monetary side of monetary union than for the fiscal concomitants that should have underpinned its stability (and prevented the threat of large-scale monetisation of fiscal debt burdens). No adequate provision on a European basis existed for banking supervision and regulation, which, like fiscal policy, was left to diverse national authorities.
** Harold James, Making the European Monetary Union, Harvard University Press, 2012. p.382
* The eurozone’s significance was more than symbolic. It implied the gradual synchronization of its members’ economies, including monetary policy, national investment and transfers between rich and poor regions. For northern Europe the euro bound Germany into ever closer union. For Spain, Italy and Greece, it was a double-edged sword. It signified merger with Europe’s most sophisticated economies, but also economic adjustments for which these countries were by no means ready. Britain had joined the Exchange Rate Mechanism, but dropped out with the pound under extreme pressure on ‘black Wednesday’ in 1992. The Major government declined to join the euro. It also ‘opted out’ of Maastricht’s ‘Social Chapter’, which covered areas such as employment rights.
** Simon Jenkins, A Short History of Europe: From Pericles to Putin (2018)
* Europe’s political stability, social cohesion, economic prosperity and security are more threatened today than at any point since the Cold War, Russia is destabilizing the Continent on every front. Indigenous factors – whether long-extant nationalism, design flaws in the Eurozone, lack of a common foreign policy, or incapability at assimilating immigrants – certainly lie at the root of these crises.
** James Kirchick, "Russia's Plot Against the West" (March 2017), Politico
* The euro is bad for Europe. The euro is bad for the Netherlands, it’s especially bad because it is a stimulus for politicians to kill the Welfare State. I look forward to a European economy using multiple currencies. In the end that will be much better: it will make us more resistant to shocks and makes us less vulnerable to what is happening now.
** Arjo Klamer, cited in: Hans von der Brelie, "The Dutch face austerity," at euronews.com, 2012/05/25
* What has happened, it turns out, is that by going on the euro, Spain and Italy in effect reduced themselves to the status of Third World countries that have to borrow in someone else’s currency, with all the loss of flexibility that implies.
** Paul Krugman, "Paul Krugman Does Modern Money Theory: Today’s Links"
* EMU wasn't designed to make everyone happy. It was designed to keep Germany happy - to provide the kind of stern anti-inflationary discipline that everyone knew Germany had always wanted and would always want in future.
** Paul Krugman, "The euro: beware of what you wish for", Fortune (1998)
* The clear and present danger is, instead, that Europe will turn Japanese: that it will slip inexorably into deflation, that by the time the central bankers finally decide to loosen up it will be too late.
** Paul Krugman, "The euro: beware of what you wish for", Fortune (1998)
* By trying to move prematurely to monetary union, we would run very serious risks. The dangers of forcing the pace have been amply demonstrated in Germany. Karl Otto Pohl, the director of the Bundesbank, has described Germany's experience as "a drastic object lesson" of the need for prior convergence before establishing a currency union. Reunification there has meant the rapid merger of two very different economies. The short-term consequences are a huge rise in the German budget deficit and rising unemployment in eastern Germany, but for the rest of the Community their experience is salutary. It shows the strains and tensions set up by moving to currency union before there is proper economic convergence. In the case of Germany one strong currency and one strong economy effectively took over those of a weaker neighbour. How much greater would those strains and tensions be if 12 very different states with different economies were now to adopt a single currency?
** Norman Lamont, House of Commons debate, 24 January 1991
* In a monetary union with irreversibly fixed exchange rates the weak would become ever weaker and the strong ever stronger. We would thus experience great tensions in the real economy of Europe. For this reason alone, monetary union without the simultaneous integration in fields like fiscal policy as well as regional and social policy is completely inconceivable... In order to create a European currency, the governments and parliaments of Europe would have to be prepared to transfer sovereign rights to a supranational institution.
** Karl Otto Pöhl, President of the Bundesbank, 1988
* The idea that the euro has "failed" is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do.
** Greg Palast, "Robert Mundell, evil genius of the euro", The Guardian, 26 June 2012
** "The Euro is a Big Success - No Kidding", gregpalast.com
* ECB [European Central Bank] President Mario Draghi’s famous promise to do ‘whatever it takes’ to preserve the eurozone was a masterly move to buy time. But monetary policy cannot solve the currency union’s problems.
** Robert Rubin, "The Search for a Monetary-Policy Wizard and Political Moral Hazard", Wall Street Journal (February 23, 2015)
* Moving to a full monetary union in Europe is like putting the cart before the horse. A major shock would result in unbearable pressure within the Union because of limited labour mobility, inadequate fiscal redistribution, and a ECB (European Central Bank) that will probably want to keep monetary conditions tight in order to make the euro as strong as the dollar. This is surely the prescription for major future problems.
** Dominick Salvatore, "The common unresolved problems within EMS and the EMU", American Economic Review, vol. 87, n. 2, pp. 224-226

## See also

* Currency
* Money