Making the European Monetary Union

Harold James 17 February 2013

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It is often claimed – especially but not only by US economists – that the travails of the euro show that it is impossible to have a monetary union in the absence of a political union, and that Europe is necessarily embarking on a US-style experiment in federalism. Thomas Sargent used his Nobel Prize speech to urge Europeans to follow the model of Alexander Hamilton (2011). Likewise, Paul de Grauwe recently stated the case quite simply: “The euro is a currency without a country. To make it sustainable a European country has to be created” (2012).

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Topics:  Economic history EU institutions

Tags:  Eurozone crisis, Bretton Woods, German surplus

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