The problem isn't the euro, it is the stranglehold of austerity.

Austerity is baked into the Euro at the treaty level.

Of course since the relevant articles of the treaties, much like the American "debt ceiling," codify an incoherent conventional wisdom rather than a rigorous economic analysis, there are all sorts of workarounds should workarounds be desired. But that would be a transparently bad-faith reading of the treaties.

Now, I don't have a problem with engaging in a little legal legerdemain to get around a mutual suicide clause - or even just flat up breaking the relevant clauses. But that is because I find a constitutional crisis much less scary than a constitutional crisis following ten years of austeritarian idiocy, not because I labour under any illusion that making policy based on a transparently bad-faith reading of the constitution will not result in a constitutional crisis.

And dismantling the euro would cause at least short term disruptions in the trade of the euroblock, which is most emphatically not what we need right now.

That is not the dominant historical experience of countries withdrawing from the gold standard in the 1920s and '30s.

Heck, the need to hedge currency movements in cross border production flows means even more games for finance to play

Nothing prevents the central bank of a de-pegged currency from acting as a non-profit market maker in vanilla currency swaps and forwards.

- Jake

Friends come and go. Enemies accumulate.