Time to end the Euro

For all its recent crises, it is easy to forget just how much of a stunning success the European Union has been. Built on the backs of a crumbled Europe which had twice committed euthanasia within the past half-century, it created a confederacy to truly inspire the world. Far from merely being a check to the Cold War Superpowers, Russia and the United States, it has become a symbol of democracy and liberalism for all to aspire to. It turned bitter foes, Germany and France, into staunch allies, whilst allowing for democracy to thrive in Greece and Spain, countries which previously were totalitarian in nature. It accepted and helped rebuild the former Soviet states, to such an extent that Poland is now one of the largest economies in the world. From its humble origins, the EU has become an outstanding achievement, and it is to commended for that.

Unfortunately, this only serves to make the current crisis all the more tragic. The true culprit? The Euro. While an admirable idea, it was ill-though out and poorly equipped to deal with any crisis, let alone one of this magnitude. With the strict guidelines under which the ECB must operate, it has in all but name, returned Europe to the halcyon days of the gold-standard. Unlike the 19^th century however, all European states now operate under a democracy, which is incompatible with gold. The only way to escape from a recession with a fixed-exchange rate? Deflation and austerity, which in addition to having a very low chance of success, lead to huge civil unrest. The results have already begun to take hold. Golden Dawn in Greece may have been the first of the extremists but they will not be the last. Recent European elections showed a huge surge in support for far-right, anti-EU parties, most notably UKIP and National Front. As the global recession drags on, one can only ask what the future holds. A resurgent Russia has little to fear from a divided EU, and Putin will use this to his full advantage. Across the continent, but most of all within Euro-18 people are becoming more and more disenfranchised with the European system. The UK is set to hold a referendum on exiting the EU, a result which would be utterly disastrous for all parties involved.

The solution? Abandon the euro, or at the very least, allow it to lie dormant for a number of years. With proper thought and planning, a second iteration may be more successful. But it is foolish to carry along with a system nobody no longer wants, particularly which causes such harm. A single country’s attempt to leave the Euro would be devastated by bank runs. However, a combined effort, in conjunction with capital controls, could severely ease the burden. Debt-ravaged countries such as Greece and Ireland could devalue their currencies to allow their economies to recover. While this may seem a drastic option, it really is the only way forward, lest the citizens of Europe’s nations are to remain laggard amidst economic turmoil

Europe’ s democratic credentials have already been severely damaged in recent years, from forcing the Irish people to re-vote on the Lisbon treaty to replacing Greece’s democratically elected government. Yet it is not too late to save its reputation. It must first return power to its member states. This is most pressing in the cases of the EURO-18, who urgently need control over their own currencies. Then, and only then, can the EU hope to emerge from this with a modicum of its reputation intact. Given recent trends however, it seems as if Europe is once again, on the road to euthanasia.