Editor's note: This contribution by the late journalist I.F. Stone first appeared in our January 1975 magazine.
Ten years ago on New Year’s Day, an economic measure was implemented that its architects thought would be celebrated forever. Instead, a decade later, the creation of the euro is seen as a major disaster.
A Europe-wide common currency has been a major cause of the economic crisis that has gripped the continent. By shackling the various countries in an economic straitjacket and by imposing brutal austerity and anti-growth policies over such a broad swath, the euro has made tens of millions suffer terribly. No wonder that even its inventors seem to be willing to forget what should have been a celebratory anniversary.
“Ten years later, the word ‘euro’ in a headline is usually paired with the word ‘crisis,’ ” reports the New York Times. “Instead of hosting celebrations for the ten-year anniversary, policymakers appear to be staying as quiet as possible. … In Brussels, there will be neither a ceremony nor even a news conference to mark the occasion.”
In a number of ways, the euro has been a major factor in the current continent-wide mess. First, it has prevented crisis-ridden nations from taking the necessary steps to revive their economies.
Nobel laureate and New York Times columnist Paul Krugman explains.
“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,” Krugman writes. “In particular, since euro-area countries can't print money even in an emergency, they're subject to funding disruptions in a way that nations with their own currencies aren't—and the result is what you see right now.”
And the European Central Bank, with its German-driven agenda of extreme fiscal conservatism and anti-inflation hawkishness, has played a terribly detrimental role. Its approach makes the Federal Reserve, with its attempts to stimulate the American economy in the wake of the subprime debacle, look positively enlightened by comparison.
“Some kind of history was made in Brussels, where Germany, enforcing its hegemony in all the wrong places, imposed changes in the European treaties that make fiscal austerity permanent and legally binding, with sanctions for slackers,” writes Andy Robinson in The Nation, narrating what happened at the summit meeting a few weeks ago. “It was like the Treaty of Versailles after World War I, only the other way around, with Germany now on top.”
No wonder some astute economists are calling for countries like Greece to exit the euro—a move that will effectively spell the end of the decade-long project.
“Greece cannot afford to settle for any deal that does not allow it to grow and make its way out of the recession,” Mark Weisbrot of the Center for Economic Policy and Research wrote in the New York Times some months ago. “The attempt to shrink Greece’s way out has failed. If that’s all that the European authorities have to offer, then it is time for Greece, and perhaps others, to say goodbye to the euro.”
Ten years after the folly of its creation, it is time to give the euro a decent burial.
If you liked this article by Amitabh Pal, the managing editor of the Progressive magazine, please check out his article entitled "The Year the Protester Took Center Stage."