The Greek debt and deficit crisis, the exposed contradictory pressures on the euro, and now the Irish emergency have combined to raise fundamental questions about the viability of a single currency shared by widely divergent economies. European leaders have been issuing shrill warnings that the very future of the EU hinges on the survival of the euro.
There\’s two bits here that I\’m having a very hard time understanding.
The first is why a default should mean the end of the euro. To take an obvious example, the Lehman default didn\’t mean the end of the US dollar.
Sure, I can and do understand that there\’ll not be a real solution to this non-optimal currency area without either some countries leaving it or a great deal more economic and fiscal union.
But a default? We\’ve had, what, 800 sovereign defaults over the centuries. What\’s one more?
The other is that I don\’t see the end of the euro as being the end of the EU. Of a particular vision of it, yes. If the euro goe then so does that (for some) desire to have ever greater economic and fiscal union. But why that should mean the end of the free movement of goods, capital and people I don\’t know.