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Future of euro is rather political than economic matter

Published on January 12, 2012 by: in: Economy

The history of the ancient common currency shows that everything depends on politics, not the economy. For example, Latin and Scandinavian monetary unions collapsed, because of the cessation of unrestricted flow of gold between the forming countries at the outbreak of World War I; also the Austro-Hungarian and succeeding Czechoslovak crown disappeared along with the federal states in which they emitted.

On the other hand, effective political union has always placed a solid basis for monetary unification. This happened in Switzerland, where the constitution, adopted in 1848, gave the exclusive right to carry out monetary emission to the federal government so that twelve Swiss franc denominations replaced several thousand types of coins that were in circulation so far.
Several years later Neapolitan ducats, Florentine florins and various local versions of lira were replaced by the united Italian currency, which was in circulation until the end of the twentieth century.
In Germany monetary union operation was performed twice. In Wilhelmine Reich no one regretted the disappearance of the southern German gulden, the Bremen thaler and the Hamburg mark, despite the significant economic differences between different parts of the united state. In 1990 the German monetary union, very dubious from an economic point of view because of joining two economic worlds, proved to be stable thanks the political determination.
Even in the weak – and surely economically not integrated – interwar Poland the reasonableness of the common currency for Galicia, Congress, Borderlands, Silesia and Great Poland was not challenged. So it will be also this time, if Europe decides to integrate more, not less, euro will survive despite all the today’s difficulties.

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About Krzysztof Iszkowski

Sociologist of politics. Graduate of the University of Warsaw (sociology) and Warsaw School of Economics (international relations), PhD (2008) in the Institute of Philosophy and Sociology of the Polish Academy of Science. A member of the Research Center on Democracy, author of Liberte!.

Fredrich Naumann Foundation For The Freedom
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