Eurozone Dystopia

Eurozone Dystopia

Groupthink and Denial on a Grand Scale

William Mitchell

Eurozone Dystopia traces the origin of the Eurozone and shows how the historical Franco-German rivalry combined with the growing dominance of neo-liberal economic thinking to create a monetary system that was deeply flawed and destined to fail. It argues that the political class in Europe is trapped in a destructive groupthink which prevents it from seeing their own policy failures. Millions are unemployed as a result and the member states are caught in a cycle of persistent stagnation and rising social instability.

Chapter 22: Abandoning the euro

William Mitchell

Subjects: economics and finance, political economy, post-keynesian economics, politics and public policy, european politics and policy, political economy


Reuters news agency reported the Italian Welfare Minister, Roberto Maroni, saying that Italy ‘should consider leaving the single currency and reintroducing the lira’. The Minister said the euro was a ‘disaster’ and ‘has proved inadequate in the face of the economic slowdown, the loss of competitiveness and the job crisis’. His remedy was to ‘to give control over the exchange rate back to the government’ and empower the Italian government to ‘defend national industry from foreign competition’ (Reuters, 2005). The news report was from June 2005. His reasoning remains sound today. However, whenever someone proposes ‘Grexit’ or ‘Spexit’ or ‘Exit’ generally, hysteria erupts. Predictions of devastation, catastrophe, hyperinflation, financial market lock out, the end of Europe, and more are heard at the mere mention of the prospect that a nation or nations would be better off abandoning the euro and restoring their own currencies. What the political leaders hate the most is when the word ‘Argentina’ also enters the exit debate, followed a little later by Italy. The Troika can bully Greece because it is small, insecure in its own identity, and receives more from the European Union budget than it contributes. Italy is a different beast altogether not only because of its size and sense of place in Europe and the world, but also because it is a net contributor, by a large margin, to the European Union budget.

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