Exiting the Euro? Alone or in small groups, disaster regardless

Italian version posted on October 27

When the great ones speak, the not-as-great had better think seriously before entering the arena. Myself, I believe i have been silent long enough after reading Joseph Stiglitz The Euro and its threat to the future of Europe. Allen Lane, Penguin Random House, 2016. I began discussing some of the book’s ideas in my Not the Euro Threatens Europe, but the National Governments, posted on October 21 (English version; Italian version posted on September 22). In that piece I was clearly putting some distance between Stiglitz’s positions and mine: the difference between the two titles speaks volumes.

      Today I want to argue in favor of my positions further by moving on to consider Stiglitz’s claim according to which a member state of the Economic and Monetary Union, also denominated  (derogatorily, I think)  ‘the Euro Area’, can rid itself and its citizenry of the deadly constraints imposed by the Euro simply ‘exiting the Euro’, whether going alone or joining up with other likely-minded states. Here is my thesis: it would be the end of that country. Where by ‘end’ I do not mean ‘simply’ the end of that country’s economy: rather, I refer to the end of the country itself. Others have studied the effects of such a move through quantitative estimations. That job having been done, and considering it totally irrelevant in our instance, I will simply ‘talk’ about the scenarios that such move would open up. Indeed, I believe that the effects of exiting would be so catastrophic that no quantitative issue can actually arise, because assuming that quantitative effects are measurable amounts to assuming continuity between the ‘before the exit’ and the ‘after the exit’ scenarios. A continuity that  I flatly deny exists. And since Stiglitz often refer to Greece in his excellent book, I also will refer to the ‘Greek case’, albeit less than Greece deserves. But I will get to that later.
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