{"version":"1.0","type":"rich","provider_name":"Acast","provider_url":"https://acast.com","height":250,"width":700,"html":"<iframe src=\"https://embed.acast.com/$/9a03fe9e-1ff0-4dcc-b3f6-50bd1f016ea4/4346b01f-f6a4-48ae-b868-81c1da7a5098?\" frameBorder=\"0\" width=\"700\" height=\"250\"></iframe>","title":"Talking Politics Guide to ... The Euro","thumbnail_width":200,"thumbnail_height":200,"thumbnail_url":"https://open-images.acast.com/shows/6195701f2eacc3a36070252a/619570bccb3c660012e3d18f.jpg?height=200","description":"<p>We talk to political economist Helen Thompson about the birth of&nbsp;the Euro and its tortuous recent history.&nbsp;Whose idea was it in the&nbsp;first place and how much of its current troubles were baked into its&nbsp;origins?&nbsp;A story of ambition, intrigue and unintended consequences.</p><p><br></p><p><strong>Talking Points:</strong></p><p><br></p><p>The euro was the brainchild of the French government, sometime around late 1987.</p><ul><li>The French had become extremely dissatisfied with the exchange rate mechanism. They thought the set-up benefitted Germany to the expense of everyone else.</li><li>France saw monetary union as a way to Europeanize monetary policy.</li></ul><p><br></p><p>The French persuaded the rest of the European community to set up a committee to look into monetary union, which was chaired by the former French finance minister.</p><ul><li>He understood that union would have to be on German terms: there would be an independent central bank committed to price stability.</li><li>Helmut Kohl also wanted shifts on the institutional questions within the European Community.</li></ul><p><br></p><p>The Maastricht Treaty was agreed in December 1991—ratification went on for two years.</p><ul><li>The treaty is about much more than monetary union.</li><li>During contentious elections, Kohl started talking about monetary union as a symbol of European peace rather than a purely macroeconomic issue.</li></ul><p><br></p><p>The general improvement in economic conditions in the mid-1990s allowed the monetary union to proceed.</p><ul><li>This doesn’t mean that there weren’t significant issues, but there wasn’t an existential crisis like the one that would emerge in 2009 with Greece.</li></ul><p><br></p><p>Before the euro itself got going, there was the convergence of interest rates. Even for states like Italy and Greece, that has been a clear advantage.</p><ul><li>You also see some alignment on inflation.&nbsp;</li><li>But you don’t get fiscal convergence. Some states run much higher deficits than others.</li></ul><p><br></p><p>If the euro were to end now, it would be because of an implosion not states voluntarily seceding.</p><ul><li>There is more skepticism over the euro in Eastern Europe.</li></ul><p><br></p><p>There is a recession coming; this will put more pressure on this system.</p><ul><li>The flashpoint may be Germany.&nbsp;</li><li>There is going to be considerable pressure to go back to quantitative easing. Whether Draghi’s successor can secure tacit German approval is a different question.&nbsp;</li></ul><p><br></p><p><strong>Further Learning:</strong></p><ul><li><a href=\"https://www.lrb.co.uk/v40/n12/helen-thompson/will-it-hold\" target=\"_blank\">Helen for the LRB: Will the EU hold?</a></li></ul><p><br></p>","author_name":"David Runciman and Catherine Carr"}