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I don't see a road to a Seuro, and I see no reason for it. But I am glad you wrote this up, because I think it highlights how our views diverge on the topic.

European Tribune - A Two Monetary Union Solution to Problems in the EMU

I believe that the monetary policy of any monetary union of which Germany is a part will have to be similar to the present situation - unless and until it massively fails.

I don't think Germany is the problem, just the main symptom. Yes, Germany runs an unsustainable strategy for current account surpluses and fixed exchange rate. But absent cooperation from ECB and political leaders all across Europe they would have been forced to recycle their surpluses or see their claims written of.

The main problem is instead that all of the elite politcal class and the ECB are acting in collusion (based on belief or interest) to apply Shock Doctrine to the European economies, starting from the periphery.

Now say that Syriza wins the next Greek election and manages to pull together a majority in parliament to roll back austerity and replace it with prosperity. Then either the ECB backs down or it forces Greece to leave the euro. If it backs down Greece has no reason to propose a Seuro. But perhaps more importantly if Greece is forced out it has no reason to enter into a new monetary union with other rejects.

Say that several countries are forced out after electing governments that would support living wages, renewable energy and full employment. None of those needs a monetary union. With a Seuro, two arguments in favor of the euro would be gone, a Seuro grants neither European unity nor sooths insecure emotions by being a symbol of being accepted into Europe proper. There would be a simple reason against, the failures of EMU showing the risks and no arguments in favor.

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by A swedish kind of death on Fri Sep 20th, 2013 at 06:03:30 AM EST

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