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The Future of the Euro Still Lies in its Past

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The true problem for the future of the Euro is to get a wider statute for the European Central Bank (ECB) similar to those of other central banks, notably the Fed, to permit better monetary policy. This means the power to act as a lender of last resort or “whatever it takes” (Draghi 2012). People consider this possibility tied to the political will of the main member states (Germany and the Netherlands, partly France). However, two other problems would remain unresolved if the Euro is to have full legitimacy as a paper money: a state behind it and a common Eurozone fiscal policy. This means a move to a political union, which is less possible than the approval of a new ECB statute. The existence of these problems does not mean that the Euro cannot survive, but that it depends on the will of both the market and the owner of official reserve denominated in Euro. It also depends on acceptance by member countries affected by the negative effects of not having a true and free lender of last resort and a targeted policy to resolve the weakness of the non-optimal currency area of the Eurosystem which preexisted the birth of the Euro. This is why the future of the Euro still lies in its past, not having found a consensus on what to do or leaders capable of filling the gap. Collapse is always possible.

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Correspondence to Paolo Savona.

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Savona, P. The Future of the Euro Still Lies in its Past. Atl Econ J 43, 407–414 (2015). https://doi.org/10.1007/s11293-015-9477-z

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  • Monetary policy
  • Central banking
  • Non-OCA
  • Fiscal policy
  • Supply policy


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