Skip to main content
37b30f0346f86ffc0edb8300_ve1218c.jpg

The Poetry of the Euro

The euro was not just the outcome of an idiosyncratic quest to reduce the wear on pockets stuffed with odd national coins, or to facilitate intra-European trade. The bold European experiment reflected a new attitude about what money should do, as well as how it should be managed.

PRINCETON – The purpose of creating a common currency has been largely and surprisingly forgotten in crisis-torn Europe. Instead, there seem to be more pressing concerns: gloomy speculation about the eurozone’s impending collapse and desperate attempts to find institutional fixes to its extensive governance problems.

But the euro was not just the outcome of an idiosyncratic quest to reduce the wear on pockets stuffed with odd national coins, or to facilitate intra-European trade. The bold European experiment reflected a new attitude about what money should do, as well as how it should be managed. In opting for a “pure” form of money, created by a central bank independent of national authority, Europeans self-consciously flew in the face of what had become the dominant monetary tradition. 

In the twentieth century, the creation of money – paper money – was usually thought to be the domain of the state. Money could be issued because governments had the power to define the unit of account in which taxes should be paid. This tradition went back well before paper, or fiat, currencies. For many centuries, even while metallic money circulated, the task of defining units of account – livres tournois, marks, gulden, florins, or dollars – remained a task of the state (or of those with political power).

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.

Subscribe

Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.

https://prosyn.org/pyS0FnQ;
  1. haass103_GettyImages_redeastasiamapdotslines Getty Images

    Asia’s Scary Movie

    Richard N. Haass

    A snapshot of Asia would show a region at peace, with stable societies, growing economies, and robust alliances. But, if we view history as a moving picture, we may well come to look back on this moment as the time in which the most economically successful part of the world began to come apart.

  2. roubini130_GettyImages_iphonehandstealingpiggybank Getty Images

    The Great Crypto Heist

    Nouriel Roubini

    Cryptocurrencies have given rise to an entire new criminal industry, comprising unregulated offshore exchanges, paid propagandists, and an army of scammers looking to fleece retail investors. Yet, despite the overwhelming evidence of rampant fraud and abuse, financial regulators and law-enforcement agencies remain asleep at the wheel.

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated cookie policy and privacy policy.