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A Seuro wouldn't change that much.
This is where I think most go wrong in dismissing this project. Just having a monetary union seperate from the EMU and having that union set interest rates and the availability of finance to the needs of the periphery and start some recycling mechanisms would enable members to devalue their currency WRT the EURO, reducing the burden of debt on their people and boosting employment while improving terms of trade. This immediately eliminates many of the most oppressive aspects of the EMU on these societies. It would also better enable the members to deal with a likely financial collapse by adopting sane fiscal policies, for starters. Now other peripheral countries whose societies are suffering from inappropriate interest rates and fiscal policies would face economic pressure to join. These would become unbearable when a financial collapse occurs. And under this scenario the other peripheral countries currently suffering in a single union NOT addressing their needs would have a currency union available that is run in a manner that is appropriate to their needs.

This would lead to a situation where there are two separate currency unions with the current EMU containing the countries with export surpluses and some with deficits and another with countries that have almost exclusively consists of countries with current account deficits. But each could get fiscal and monetary policies suitable to their needs - i.e. two separate currency unions each of which much more resembles an optimal currency union than is the case now.

But the original founding countries of the SEURO Zone would have strong influence over the policies to be followed and a structure that is, inherently, left leaning due to the mutual social, fiscal and monetary policies and new entrants could be obliged to respect these policies. So Conservative led peripheral countries would be constrained in how right wing they could be due to the terms of entry. And they would join not because the liked the politics but because of massive political pressure and the alternative of chaos if they remain in the EMU.

I believe that all that is required is for two EMU members to form a separate currency union run along lines I described and for there to be a financial crisis for the above sequence of events to unfold.  

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Aug 26th, 2016 at 01:01:59 AM EST
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