Similar mismatches occur with interest rates. Without national currencies there is no mechanism to make sure that eurozone nations' imports and exports between themselves ever come back into balance.
Why are we surprised that the nation at the centre of the European Union is the most financially successful, whilst those archipelagos nations on the periphery struggle to compete? The ERM should compensate for this on the basis of a nation's resources and the circumstances of geography.
Instead, Europe needs a more honest and nuanced debate. There are many options for reform, including reintroducing some domestic currencies alongside the euro, alternative mechanisms for preventing persistent current account imbalances within the eurozone, as well as a range of degrees and means of fiscal integration.
I wonder if at present there is a reluctance to discuss the dirtier side of our economies with each other? Is it this that prevents nations relinquishing more power to the EU whilst accepting governmental consultancy from fiscally successful nations? An even darker secret seems to be the macro economic history of the past two decades, the western economies have bucked and rippled as the economic wave of Russia and China's incorporation into the global economy ebbs within the system, facts the economists never reveal on news shows.
Alas under capitalism there is no idealism without economic wealth, yet every year improvements in technology reduce the cost and man power required for production. It has been a long time since the gold standard was abolished, today perhaps the only measure of currency is in the self belief of a nation or group of nations to do good and lead us forwards. Yet go forwards we must, accepting that we are willing to support each other, that is the direction of civilisation and the only economy worth valuing!
