Many commentators on the right point out that Greece no longer has the option of devaluing its currency, but doing that isn’t exactly the sort of thing those on the right should support. It’s back-door taxation, while the real solution is to have sound money, flexible labour markets and limited government. What we’re seeing in Greece and Italy is that socialists have finally run out of other people’s money and that the inability to use devaluation as a last resort is forcing politicians to engage in structural reform. The socialists are losing influence fast, something that those on the right should welcome.
I suspect the anti-euro attitude is driven more by distrust of European integration, which is seen as a threat to US economic and political interests and as a threat to Atlanticism. The existence of the euro makes it harder for the USG to make money off the USD’s status as the world’s dominant reserve currency. Note that gold used to play that role and also note that you can’t just print gold.
Yeah, the southern Europeans could have flexible labor markets and sound money — and pigs could fly. Meanwhile, in the real world, devaluation was the mechanism used to adjust wages and incomes to world market conditions. It’d be a lot easier to restore currency flexibility than it would be to make an internal devaluation work.
I’m not sure reintroducing currency flexibility would be easy, there are supermajorities in favour of retaining the euro, both in national parliaments and among the populations.
Many commentators on the right point out that Greece no longer has the option of devaluing its currency, but doing that isn’t exactly the sort of thing those on the right should support. It’s back-door taxation, while the real solution is to have sound money, flexible labour markets and limited government. What we’re seeing in Greece and Italy is that socialists have finally run out of other people’s money and that the inability to use devaluation as a last resort is forcing politicians to engage in structural reform. The socialists are losing influence fast, something that those on the right should welcome.
I suspect the anti-euro attitude is driven more by distrust of European integration, which is seen as a threat to US economic and political interests and as a threat to Atlanticism. The existence of the euro makes it harder for the USG to make money off the USD’s status as the world’s dominant reserve currency. Note that gold used to play that role and also note that you can’t just print gold.
Yeah, the southern Europeans could have flexible labor markets and sound money — and pigs could fly. Meanwhile, in the real world, devaluation was the mechanism used to adjust wages and incomes to world market conditions. It’d be a lot easier to restore currency flexibility than it would be to make an internal devaluation work.
There’s a much better explanation of the Greek referendum situation here: http://www.dailymail.co.uk/debate/article-2059637/Italy-debt-crisis-Compared-Greece-just-sideshow.html
I’m not sure reintroducing currency flexibility would be easy, there are supermajorities in favour of retaining the euro, both in national parliaments and among the populations.