Jump to ContentJump to Main Navigation
The Future of the Euro$
Users without a subscription are not able to see the full content.

Matthias Matthijs and Mark Blyth

Print publication date: 2015

Print ISBN-13: 9780190233235

Published to Oxford Scholarship Online: March 2015

DOI: 10.1093/acprof:oso/9780190233235.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (www.oxfordscholarship.com). (c) Copyright Oxford University Press, 2019. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 17 November 2019

The Forgotten Problem of Embeddedness

The Forgotten Problem of Embeddedness

History Lessons for the Euro

Chapter:
(p.21) 2 The Forgotten Problem of Embeddedness
Source:
The Future of the Euro
Author(s):

Kathleen R. McNamara

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780190233235.003.0002

The fact that Europe is not an “optimum currency area” is the wrong diagnosis for Europe’s woes. Instead, the chapter argues that the Eurozone’s biggest challenges lie not in its economic “suboptimality” but in the fact that the euro is fundamentally “disembedded” from the specific social and political institutions needed to provide a solid foundation for a monetary union. Markets need political authority to create stability, and a lack of governance will make the euro more vulnerable than its shortcomings as an optimum currency area. The history lessons of previous monetary unions—understood on a continuum of “least embedded” to “most embedded”—tell us that, if the euro is to succeed, the Eurozone should be transformed into an “embedded currency area” (ECA) with a true lender of last resort, a fiscal and banking union, and an accountable and democratically legitimate political union.

Keywords:   optimum currency area, embedded currency area, euro, monetary union, political authority

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .