Euro Exit

Sound Bite

The euro has been the worst governmental mistake since deflationary policy turned the 1929 crisis into a decade of depression. The book explains why European politicians and businessmen decided to circumvent democratic consent in order to lock their societies into a single European super-state and reap the advantages of monetary cartelization, pushing the Great Contraction towards a new Great Depression in Europe. It also shows that exit from the euro is indeed possible and how to minimize its ineluctable cost.

About the Book

The euro zone is clearly not an optimal single currency area, and thus the euro has been the worst governmental mistake since deflationary policy turned the 1929 crisis into a decade of depression. The book explains why European politicians and businessmen decided nevertheless to circumvent democratic consent in order to lock their societies into a single European super-state and reap the advantages of monetary cartelization, pushing the Great Contraction towards a new Great Depression in Europe. It also shows that exit from the euro is indeed possible and how to minimize its ineluctable cost.

The author set out the problems inherent in the idea of the Euro before it was even created. His book Euro Error (trans. Algora 1999) was prescient. The dire forecasts have been amply fulfilled. More than ten years after the error, the puzzle of why most elites in continental Europe went so completely wrong (from a general welfare point of view), are explained for the first time in the literature.

How the euro exacerbated the Great Recession in Europe is also precisely demonstrated, and the sophism of those who claim that no exit is ever possible is clearly exposed and criticized. The best way out of the single currency is for the first time delineated.

The writing style is clear and the reading easy, nontechnical, but strictly based on rigorous economic analysis. Few books in English treat of the topic in a nontechnical way, whereas there is a flurry of newspapers articles and blog comments on the subject.

The book's comparative advantage is in a simple and synthetic explanation of the initial mistake, but it adds an original analysis of the fundamental reasons why it was made in the first place. It is also original in that it criticizes the current dogma of the impossibility of euro exit (or break up) without a major financial apocalypse, and explains how to proceed to return the European economies to a growth path and independent monetary policies, while avoiding at the same time the trap of a catastrophic financial meltdown.

Table content

Introduction 1. An Unreasonable Choice When Monetary Union Brings Impoverishment Disadvantageous Monetary Unions, Viable and Non Viable When Federalism Brings Impoverishment An Inherently Destabilizing Mechanism 2. But What Political Advantage? Cartels and the Interest of Debtors A Mercantilist Bargain Adverse Effects and Self-Destruction 3. How All This Will End A More Realistic Assessment of the Cost of Getting Out The Franc Might Be Devalued only Slightly Or Not At All Conditions for Success of the Devaluation-then-Secession Approach The Urgency The Political Consequences Conclusion Appendix I. The French Banking Cartel Appendix II. The Euro, an Opportunity for France, an Opportunity for Europe -- What they were saying then...