In this new Prime Publication I discuss why the Euro is “the gold standard writ large”. Read an extended version of this article on Social Europe.
Delors Commission, 6 January 1986, European Commission Audiovisual Library
The euro not only replicated key elements of the gold standard – but went much further: European currencies were simply abolished. States lost control over both their currency and their central bank. Parallels with the operation of the gold standard explain why, like the gold standard, the euro will fail.
The euro system denies monetary policy autonomy to states, and like the gold standard, insists on full capital mobility, over-values the shared currency, creates a sense of euphoria and excess when introduced into a new state; then applies deflationary pressures on indebted states, and like the gold standard encourages nationalisms, protectionism and political resistance: the very opposite of the liberalizing motives of its architects.