Why the Euro is the gold standard writ large…

Microsoft Word - AnnNew2.docxThe euro not only replicated key elements of the gold standard – but went much further: European currencies were simply abolished. States lost control over both their currency and their central bank. Parallels with the operation of the gold standard explain why, like the gold standard, the euro will fail.

The euro system denies monetary policy autonomy to states, and like the gold standard, insists on full capital mobility, over-values the shared currency, creates a sense of euphoria and excess when introduced into a new state; then applies deflationary pressures on indebted states, and like the gold standard encourages nationalisms, protectionism and political resistance: the very opposite of the liberalizing motives of its architects.

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Labour must oppose the Greek “bail-out” and support the dismantling of the Euro

Opinion within Labour appears to be moving on the Greek “bail-out”. First, Ed Balls contemplates working with eurosceptic Tory MPs to oppose the use of British cash to fund the bail-out. Not quite principled opposition to the bail-out itself, and not surprising therefore that he was accused of opportunism. Then this week Jack Straw, always somewhat inclined to euroscepticism, argued that, since collapse of the Euro was inevitable, it was better that it happen quickly than for the Euro to endure a “slow death“. And today, Alistair Darling (£) argues that the eurozone cannot survive in its present form with a punitive approach that will not work. Unfortunately, his answer still lacks credibility and doesn’t go far enough: Continue reading