As a counter to the last post, an interesting from investment banker Marshall Auerback at EconoMonitor, worth a read for a bit of history on the (evidently flawed) economic assumptions underpinning the formation of the euro and some links to some further reading:
“the eurozone’s architects failed to follow through with the logic of a political union. Nobody cares about ‘trade imbalances’ in the Canadian confederation. And nobody would care if Alberta, for example, were to run perpetual trade surpluses with the other 9 provinces. Fiscal transfers from the strong to the weak are part of the Canadian bargain in a full national union. Had Europe adopted a similar federal structure, the Greek and Spanish issues would be moot.
“As it stands, however, the architects of the euro have created a doomsday machine and a gift for speculative capital… throughout the evolution of the architecture of the European monetary union, it was assumed that deposit movements from one country to another would all be smoothly handled by the market mechanism.”
Markets, eh? If there’s one thing we’ve learned in recent years, you can’t trust markets. Or bankers. Or economists. Or politicians. Or voters. Anyone, basically.