The Euro: And its Threat to the Future of Europe by Joseph Stiglitz
Joseph Stiglitz’s timing could hardly be better, said Philip Aldrick in The Times. His “bold” new book comes out just as Brexit has “plunged” the EU into its deepest ever “existential crisis”. In The Euro, the Nobel laureate and ex-World Bank chief economist has produced a scathing attack on the prevailing political and economic ideology of recent decades, seen through the prism of the “disaster of the single currency”. Stiglitz is a fierce left-wing opponent of austerity, and he regards the euro, established in 1999, as fatally “flawed” from the outset. A currency designed to “serve” Europe’s people ended up being a “straitjacket”, turning much of southern Europe into a “19th century debtors’ prison”.
Stiglitz is adamant that “the euro created the euro crisis”, said Martin Sandbu in the FT. Yet the “most original” sections of his book contradict this thesis. In three “hard-hitting” chapters, he points out the many “terrible” policies which eurozone leaders pursued during the debt crisis of 2009-2016, imposing punitive austerity measures on countries such as Greece and Spain. Had the “right crisis policies” been adopted, the eurozone would probably have fared no worse than other major economies after the financial crisis – suggesting that the euro’s design wasn’t the real problem. On the contrary, the euro was always a mistake, said Dominic Lawson in The Sunday Times. The EU, with no fiscal or political union, simply isn’t “a suitable area for a monetary union”. Stiglitz recognises this – but his proposed solutions, which include Germany abandoning the euro, or further integrating the EU nations, are non-starters. He blames “neoliberalism” – Thatcherism – for all of Europe’s ills, when the real problem facing European economies isn’t a lack of regulation, but an “excess” of it.