The Future of the Euro

- A synthetic and coherent account of all aspects of the euro crisis - Combines political with economic analysis, emphasizing the political economy aspects of the euro problem, experience, and likely future(s) - Counters the existing and more orthodox theory of 'optimum currency areas' (OCA) by stressing the 'minimum' requirements for institutional embeddedness (or embedded currency areas - ECA) The Future of the Euro is an attempt by political economists to analyze the fundamental causes of the euro crisis, determine how it can be fixed, and consider what likely futures lie ahead for the currency. The book makes three interrelated arguments that emphasize the primacy of political over economic factors. First, the 'euro problem' is discussed as the result of the single currency's fundamental lack of institutional embeddedness, insofar as its original design omitted three 'forgotten unions' alongside of monetary union: a financial and banking union, mutually supporting institutions of fiscal union and economic government, and a political union holding similar legitimacy to the nation-state. Second, the 'euro experience' shows how the euro's unfinished design led to economic divergence - quietly altering the existing distribution of economic and political power within Europe prior to the crisis - which in turn determined the EU's crisis response. The book highlights how the euro's four most important members - Germany, France, Italy and Spain - each changed once they adopted the euro, why the crisis affected them so differently, and how each has since struggled to live with the commitments the euro necessitates. Third, the book examines three possible 'euro futures' through the lens of the politics of its reluctant leader Germany; through the lens of the EU's capacity to 'move forward' through crises; and through the geopolitical lens of the international monetary system. The book concludes that any successful long-term solution to the euro's predicament needs to start with the political foundations of markets.

List of Figures List of Tables Chapter 1: Introduction: The Future of the Euro and the Politics of Embedded Currency Areas Matthias Matthijs and Mark Blyth Section I: The Euro Problem Chapter 2: Forgotten Embeddedness: History Lessons for the Euro Kathleen R. McNamara Chapter 3: Forgotten Financial Union: How You Can Have a Euro Crisis without a Euro Erik Jones Chapter 4: Elusive Economic Government and Forgotten Fiscal Union Nicolas Jabko Chapter 5: Forgotten Democratic Legitimacy: 'Governing by the Rules' and 'Ruling by the Numbers' Vivien A. Schmidt Section II: The Euro Experience Chapter 6: Germany's Euro Experience and the Long Shadow of Reunification Abraham Newman Chapter 7: Europe's Middle Child: France's Statist Liberalism and the Conflicted Politics of the Euro Mark I. Vail Chapter 8: The Troubled South: The Euro Experience in Italy and Spain Jonathan Hopkin Section III: The Euro Future Chapter 9: Europe's New German Problem: The Timing of Politics and the Politics of Timing Wade Jacoby Chapter 10: European Integration Past, Present, and Future: Moving Forward through Crisis? Craig Parsons and Matthias Matthijs Chapter 11: The Future of the Euro in a Global Monetary Context Eric Helleiner Chapter 12: Conclusion: The Future of the Euro: Possible Futures, Risks, and Uncertainties Matthias Matthijs and Mark Blyth Bibliography Index