Tuesday, May 29, 2012

The Euro's Democratic Deficit

by Peter Sutherland

New York Times

May 29, 2012

The greatest and undeniable economic achievement of the euro is to have saved the European economy from fracturing in the economic and financial crisis unleashed by the collapse of Lehman Brothers.

We know from the example of the 1930s how tempted national governments are to believe in times of economic crisis that devaluation and protectionism will serve the interests of their electors; and how devastating it is for all involved when national governments succumb to that temptation.

The European single currency has acted and will continue to act as a powerful bulwark against any such tendencies. Those who claim to regard the euro as simply a straitjacket from which national governments would do well to liberate themselves as soon as possible are in essence claiming that currency manipulation and economic nationalism are the royal road to prosperity.

I do not believe that for a moment. Nor, ironically, do most of the euro’s fiercest critics when they are talking about any other topic than the single European currency.


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