The Euro: How a Common Currency Threatens the Future of Europe
By: Joseph E. Stiglitz
Format/Source: Paperback; my purchase
When Nobel Prize–winning economist Joseph E. Stiglitz posed this question in the original edition of The Euro, he lent much-needed clarity to a global debate that continues to this day. The euro was supposed to unify Europe and promote prosperity; in fact, it has done just the opposite. To save the European project, the euro may have to be abandoned. Since 2010, many of the 19 countries of Europe that share the euro currency—the eurozone—have been rocked by debt crises and mired in lasting stagnation, and the divergence between stronger and weaker economies has accelerated. In The Euro, Joseph E. Stiglitz explains precisely why the eurozone has performed so poorly, so different from the expectations at its launch: at the core of the failure is the structure of the eurozone itself, the rules by which it is governed. Stiglitz reveals three potential paths forward: drastic structural reforms, not of the individual countries, but of the eurozone; a well-managed dissolution of the euro; or a bold new system dubbed the “flexible euro.” With trenchant analysis—and brand new material on Brexit—The Euro is urgent and timely reading.
I had been eyeing this book for ages. I came across this book as I was looking up books about the current state of the EU with the euro crisis and ongoing issues that the EU is faced with; I just wanted to read what people were thinking and what their alternatives were to the present situation. I finally got my hands on it a while ago but had to wait until I finished the school year to read it as I wanted to give it my undivided attention.
I have to say this is such a definitive book, I will have to re-read it again at some point in order for all of the suggestions that Stiglitz proposed to sink in. Suffice to say all of my thoughts to date about the euro and what needs to be done in order to improve its performance and to strengthen the eurozone as a whole were echoed quite eloquently in this book. Even if economics isn’t your forte–it certainly isn’t mine, I only started reading quite a bit of it in passing towards the end of my Masters–Stiglitz writes in such a way that makes economics and understanding how the market works quite easy to understand and follow. He explains the different departments and mechanisms in place in the eurozone and the EU to regulate the euro as well as the different theories and ideas associated to the attitudes towards the market and the currency.
The establishment of the euro was not just a way to integrate Europe further but was an experiment in that it was never done before, the idea of 19 individual sovereign countries adopting a single currency. Unfortunately it was established too quickly without all of the appropriate mechanisms and integrations of other economic sectors to ensure stability. I actually learned a lot from this book, particularly with regards to market liberalism and how much it affected the euro and how it turned out the way it did. I also learned a lot more about austerity and more about the politics behind the economics; in some ways much of the ideas presented here reinforced my own ideas about what happened with the euro and what steps it should take next, but in other ways it also challenged my ideas about certain policies implemented and the perspectives involved, such as that of austerity.
I think ultimately The Euro should be required reading for anyone studying European history and politics and policy. Unfortunately I’m not terribly optimistic that politicians will adapt one of the three potential paths that Stiglitz laid out; it seems right now that leaders are trying for “more Europe” but unless all the countries readily agree for more integration, circumstances will force their hand down one of the three paths. The ongoing negotiations concerning Brexit is already prompting matters. Anyway, The Euro is an excellent and informative read worth checking out.