The Political Case For the Euro

George Mason Professor Tyler Cowen, my favorite economics blogger (and local  ethnic food blogger as well) has a column in Bloomberg that explains his new view that the Euro as a currency has a better future than he had originally thought.  Cowen, being an economist, focuses on the economic reasons why the Euro's future seems brighter, but he makes a very interesting political point as well:  one unanticipated affect of the Euro is to make nations more committed to the EU:

It’s always worth re-evaluating one’s views, and my latest revision is that the euro currency is better and less vulnerable than I had thought. I still believe its creation and later expansion were mistakes, but I now see them as much smaller mistakes than before. Many of the biggest costs lie in the past, so the euro might be a net plus moving forward.

What’s the new evidence? For one thing, geopolitics seem to be favoring the euro. France, the Netherlands and (soon) Germany are rejecting at the voting booth far right and populist parties that oppose the European project.

One of the original goals of the euro was to tie countries to the European Union and its rules for free trade and free migration. The major EU country that eschewed euro adoption, the U.K., has now voted itself out the union altogether, to its detriment. Estonia and Latvia, which adopted the euro in part for political reasons to tighten their bonds with the EU, still seem secure against potential Russian aggression. The biggest political trouble spots seem to be Hungary and Poland, neither of which are euro members. That may be a coincidence, but it may also reflect a very real psychological tie resulting from the currency adoption.

Read it all here.  Check out his economics blog here, and his ethnic food guide to the DC area here.