Markus K. Brunnermeier, Harold James & Jean-Pierre Landau
Princeton University Press, 2016
Why is Europe’s great monetary endeavor, the Euro, in trouble? A string of economic difficulties in Greece, Ireland, Spain, Italy, and other Eurozone nations has left observers wondering whether the currency union can survive. In this book, Markus Brunnermeier, Harold James, and Jean-Pierre Landau argue that the core problem with the Euro lies in the philosophical differences between the founding countries of the Eurozone, particularly Germany and France. But the authors also show how these seemingly incompatible differences can be reconciled to ensure Europe’s survival.
As the authors demonstrate, Germany, a federal state with strong regional governments, saw the Maastricht Treaty, the framework for the Euro, as a set of rules. France, on the other hand, with a more centralized system of government, saw the framework as flexible, to be overseen by governments. The authors discuss how the troubles faced by the Euro have led its member states to focus on national, as opposed to collective, responses, a reaction explained by the resurgence of the battle of economic ideas: rules vs. discretion, liability vs. solidarity, solvency vs. liquidity, austerity vs. stimulus.
Weaving together economic analysis and historical reflection, The Euro and the Battle of Ideas provides a forensic investigation and a road map for Europe’s future.
Markus K. Brunnermeier is the Edwards S. Sanford Professor of Economics at Princeton University and Director of Princeton's Bendheim Center of Finance. He has written extensively on financial crises and monetary policy. Harold James is professor of history and international affairs and the Claude and Lore Kelly Professor of European Studies at Princeton University. His books include Making the European Monetary Union and Europe Reborn. Jean-Pierre Landau is former deputy governor of the Banque de France and executive director of the International Monetary Fund and the World Bank. He is associate professor of economics at Sciences Po in Paris.