The Euro Decade and Its Lessons
The single European currency, born on New Year's Day in 1999, is a rare economic shining star of the past decade. The euro's record also offers timely lessons for the debate about how to rebuild the global financial system.The current financial storm has also shown the benefits of a common currency. Some countries have been harder hit than others, and we hear again that a monetary policy conducted by a multinational ECB favors big states like France and Germany and will push the eurozone to the breaking point. Yet in the panic of the last year the Continent would have suffered more without the euro -- from currency devaluations and wildly diverging interest rates. This is the reason so many other EU countries want to join, and Italy for all of its economic problems stays in. Membership brings too many privileges.
The decade of the euro has demonstrated that there is an alternative to the instability and volatility of the era of floating exchange rates that began with the collapse of Bretton Woods in 1971. It's time to build on that lesson for the good of free markets and global prosperity.
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