Financial Times
November 7, 2011
As the European ship heads for the rocks, so the officers in charge are being thrown overboard. This week could see the departure of the prime ministers of both Greece and Italy. But while politicians may come and go, European leaders insist that one thing will remain eternal – the euro. No summit is complete without the ritualistic declaration that Europe will do “whatever it takes” to preserve the single currency. But the repeated vows to save the euro betray a dangerous confusion.
For reasons of pride, fear, ideology and personal survival, it is extremely hard for European leaders to accept that the euro is a large part of the problem. Instead they search for other explanations for the economic crisis. Countries have failed to stick to the rules. They have lied. Europe needs new political structures. The bazooka is not big enough. The markets are irrational. The people are revolting.
There are elements of truth in all these explanations. But they fail to get to the root of the problem. After roughly a decade we are discovering that a single currency area, uniting different countries with different levels of economic development – and very different political cultures – is inherently flawed.
The euro is not an end in itself. The single currency is just an instrument, aimed at promoting economic prosperity and political harmony across Europe. As the evidence mounts that it is doing the precise opposite, it is time to think not about how to save the euro – but about how to scrap it, or at least allow the weakest members to leave.
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