It is thus hard for even a European to love the euro for its potential economic effects. It is more understandable to regard the euro as an economically costly device for achieving political union. Political advocates of the euro may believe that individuals who carry euros in their pockets will come to think of themselves as Europeans and that this will reduce the risk of a recurrence of the intra-European wars that have done so much harm during the past century and half. But I think it is more likely that the attempt to achieve Europe-wide policies will in itself be a major source of conflict within Europe and with the United States. Forcing a single monetary policy on all of Europe will cause those countries that suffer what they regard as unnecessarily high unemployment to resent the actions of others.
Tax policies are another potential source of economic conflict.
Although tax policies are now left to national governments, that will not continue indefinitely as attempts at tax harmonization eventually succeed and provide the platform for seeking greater uniformity in tax rates and tax bases. Attempts to force a Europe-wide tax system on all countries will be a further source of conflict. To the extent that those taxes are used to redistribute incomes among European countries, the potential for conflict will be even greater. The Maastricht treaty that created the Economic and Monetary Union makes no provision for a country to leave the EMU and return to its own currency. While a country might nevertheless unilaterally opt to leave, it would risk being denied all of the trade benefits of the single market and might face other forms of retribution.