Even though it is almost a year old, just yesterday I came across a book titled The Tragedy Of The Euro, by professor Philipp Bagus from Universidad Rey Juan Carlos in Madrid. I have not had enough time to read it thoroughly, but what I saw in that short time span is more than enough for me to recommend it to everyone interested in knowing about the future (if any) of the European currency. You can find the full book here thanks to the Mises Institute.
It is a story of good and noble ideas being badly applied or intentionally misunderstood. It is a story of how the fathers of what today is called the European Union tried to establish economic liberalism all across Europe, thinking of the possibilities, progress and growth a Europe-wide open marketplace could bring. But sadly, it is also a story of how some countries, especially France, managed to convert this great idea into a full-fledged European super-state. A super-state with limiting regulations, the typical bureaucratic slowness and stiffness and inefficiency in general.
The book explains, with piercing clarity, the different motivations behind European countries to adopt a unified currency. Periferic countries like Greece, Ireland, Portugal, Spain and also France saw in the euro a great way to keep printing money and issuing debt (a necessary byproduct of their deficit-prone economies). With a unified currency they would be able to hide the inflation caused by this objectionable tactics, as there would no longer be a Deutsche mark to be compared against.
How did they convince Germany to be part of such an awful plan? Professor Bagus details how Germany was nearly extorted, primarily by France and the United Kingdom, to abandon the mark for the Euro as a compensation for allowing German reunification. Fearing the power a unified Germany would have, they decided to short-hand Germans by taking away their monetary independence. To be fair, Germans also saw a clear benefit in the euro, a way to boost exports to their European neighbors without the competitiveness disadvantage the strong mark created.