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This is exactly the problem. The US has a single currency that serves vastly different economies. The dollar prevents poor economies in Alabama and Mississippi
by panarky 8y ago
This is exactly the problem.
The US has a single currency that serves vastly different economies. The dollar prevents poor economies in Alabama and Mississippi from devaluing their currencies just like Italy and Greece can't devalue their currencies.
But the US also has fiscal tools like taxation and direct transfers that subsidize Alabama and Mississippi.
Fiscal policy requires political union to force wealthy economies to transfer their wealth to poor economies.
The EU doesn't have political union, and they're actually headed in the opposite direction due to discord about migration leading to stronger nationalist/populist/authoritarian leaders.
So if political union is the solution and the EU is going the other way, then it's hard to see how the Euro and by extension the EU can survive.