Europe’s Orphan: The Future of the Euro and the Politics of Debt PDF
Preview Europe’s Orphan: The Future of the Euro and the Politics of Debt
Europe’s Orphan EUROPE’S ORPHAN The Future of the Euro and the Politics of Debt MARTIN SANDBU PRINCETON UNIVERSITY PRESS PRINCETON AND OXFORD Copyright © 2015 by Martin Sandbu Requests for permission to reproduce material from this work should be sent to Permissions, Princeton University Press Published by Princeton University Press, 41 William Street, Princeton, New Jersey 08540 In the United Kingdom: Princeton University Press, 6 Oxford Street, Woodstock, Oxfordshire OX20 1TW press.princeton.edu Jacket design by Faceout Studio All Rights Reserved ISBN 978-0-691-16830-2 Library of Congress Control Number: 2015944893 British Library Cataloging-in-Publication Data is available This book has been composed in Adobe Garamond Pro by T&T Productions Ltd, London Printed on acid-free paper ∞ Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 To Ana CONTENTS PREFACE xi ONE A GiAnt Historic MistAke? 1 Spinelli’s Proposition 1 Vindication of the Sceptics? 4 A Politics of Blackmail 7 The Disowned Currency 9 The Overlapping Goals of Monetary Unification 12 A Currency Designed by Economists 15 Misplaced Misgivings 17 Europe’s Economic Drift 20 TWO Before tHe fAll 25 A Honeymoon for the Single Currency 25 The Euro and the Genesis of the Crisis 28 One Size Fits None 29 The ‘Export Competitiveness’ Conundrum 35 The Euro’s Lopsided Capital Flows 39 Losing the Printing Press 45 The Euro’s Innocence 47 THREE Greece And tHe idolAtry of deBt 48 The Promise of Europe 48 A Country Runs Out of Credit 51 The Difficulty of Putting Your Money Where Your Mouth Is 53 Three Great Morality Plays 55 The Costs of Compromise 59 Economic Tragedy 62 The Alternative That Could Not Be Named 67 An Escape from the Euro? 70 Killing Democracy in Its Cradle 73 Disenfranchisement without Respite 76 FOUR irelAnd: tHe PrivAte is PoliticAl 80 An Interview Out of the Ordinary 80 One Letter and Six Months 82 Europe’s Banking Addiction 85 Too Big to Fail 87 Pulled Down by a Helping Hand 90 Alternatives 93 Quid Pro Quo 98 Lehman Syndrome 101 FIVE euroPe diGs deePer 106 Doubling Down 106 Austere Solidarity: All Must Tighten 107 The Eurozone’s Self-inflicted Second Downturn 110 Letting Zombie Banks Roam 116 Death by Accounting 118 Irreversibility Reversed 122 The Mutualisation Fix 126 The Tyranny of Technocracy 130 Germany’s Conditions 133 The Logical Extreme 137 SIX riGHtinG tHe course: froM BAil-out to BAil-in 139 Learning from Failure 139 Accepting Default 140 Learning the Irish Lesson 144 Prising Loose a Deadly Embrace 146 Testing the Waters 149 Plunging In 150 Fiscal and Monetary Let-Up 155 Whatever It Takes 157 Lasting Injury 161 SEVEN if euroPe dAred to Write doWn deBt 165 Renouncing ‘There Is No Alternative’ 165 A Stroll through Counterfactual History 166 Fail Early, Fail Often 168 Ending the Cult of the Sovereign Signature 173 Sovereign Contagion 177 Restructuring Politics: Dealing with Greece 181 Restructuring Politics: A Less Conflicted Europe 183 EIGHT euroPe’s reAl econoMic cHAllenGes 189 Three Tasks 189 Making the Eurozone Safe from Sudden Stops 190 Idling Europe’s Economic Engine 197 A Pact Long in Need of Reform 204 Encouraging Long-term Growth 208 Unexploited Opportunities 215 NINE tHe Politics tHAt tHe euro needs 217 Cracks in the Consensus? 217 A ‘New Deal’? 217 Choosing an Alternative 221 France: The Duumvir that Abdicated 226 Germany: The Reluctance of the Hegemon 228 Insurrections 231 From Restored National Autonomy to Renewed European Integration 239 TEN GreAt BritAin or little enGlAnd? 242 The Real Choice for Britain in Europe 242 Counterfactual History: Crisis Policy with Britain in the Euro 243 Brown’s Five Tests Today 250
The list of books you might like
