What Happened After Europe’s Last Three ‘Currency Unions’ Collapsed

As the Euro and its currency face collapse, here’s a look back at 3 failed attempts over the last century to create a European currency union and a common currency.

It may come as a surprise to some of our younger readers, that the Eurozone, and its associated currency, is merely the latest in a long series of failed attempts to create a European currency union and a common currency. Three of the most notable predecessors to the EUR include the Hapsburg Empire, the Soviet Union, and Yugoslavia. Obviously, these no longer exist. Just as obvious, all of these unions, having spent time, energy, money, and effort to change the culture and traditions of member countries and to perpetuate said unions, had no desire, just like Brussels nowadays, to see these unions implode. The question then is: what happened after these multi-nation currency unions fails. VOX kindly answers: “they all ended with disastrous hyperinflation.”

It’s all good though: Europe has a beneficial donor with an endless sack of money – Germany – and 80 some million people who will never, ever consider voting out those politicians who jeopardize their standard of living (regardless how it was obtained, but hard work is a distinct possibility). Ever. Or maybe they will? Maybe they will realize, as they should have over a year ago, that each passing day that nothing changes, and the broken status quo persists, simply means the pain in the inevitable end will merely be that much greater? If recent elections are any indication, Europe should probably be very concerned. Of course, this being Europe, and the market being the market, the fact that there is reason to worry, will provide the market with reason not to worry. After all someone else will make everything better: the central planners made risk of failure illegal.
The “any cost” of course, has to be bourne by Germany. Which this time around is expected to merely stand there as its deadbeat neighbors continue to mooch off its generosity. Oddly enough, all the previous failed monetary regimes had a strong and supposedly munificent hegemon too, to pull a Realpolitik term.

What is certainly obvious is that in none of the previous occasions of monetary union collapse did the member countries think anything else. In fact, we can say what tenured economists said about the specter of the Hapsburg, the Soviet and Yugoslav collapse with absolute certainty: “the conclusion is that these should be maintained at almost any cost.”

Categories: ECONOMY

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