Leaving the euro: the temptation that always ends in failure
Every so often the idea of abandoning the euro resurfaces. History shows that devaluations never benefited 99% of the population, and the alternative is
English · Original discussion in Spanish · Published
The recurring fallacy of abandoning the euro
Every so often the same mirage resurfaces: leaving the euro to regain the ability to devalue the currency. Those who defend it usually present it as a magic solution for the economy, but the trail of countries that tried it always ends in hyperinflation and widespread impoverishment. The question is not rhetorical: what lies behind that insistence?
The competitive devaluation argument
The central idea of those in favour of leaving is that, with a currency of their own like the former peseta, they could devalue to make exports cheaper. It sounds good on paper, but history shows that 99% of the population ends up paying the price. Devaluation is not an industrial policy; it is a silent tax on the purchasing power of wages. Exporters win, families lose.
The inflation they don't talk about
Today's inflation was not caused by the euro, but by expansionary policies and speculation in the markets. Those who long for the peseta seem to forget that, under it, crises turned into inflationary spirals that devoured savings. The euro, with all its flaws, has served as an anchor against such episodes. Saying otherwise means ignoring the evidence or having very specific interests.
At the opposite end, there are those who point out that the euro has been neither a panacea nor a protection against the loss of purchasing power. But replacing it with a politically managed currency would be a leap into the void. The lesson of Venezuela is not exportable, but it serves as a warning: when monetary policy is subordinated to demagoguery, disaster is guaranteed.
The euro is not perfect, but the known alternative is worse. The debate, at its core, is not about currencies, but about who pays for the damage. And history has already given the answer.
Related discussions in the forum
Every so often the same mirage resurfaces: leaving the euro to regain the ability to devalue the currency. Those who defend it usually present it as a magic solution for the economy, but the trail of countries that tried it always ends in hyperinflation and widespread impoverishment. The question is not rhetorical: what lies behind that insistence?
The competitive devaluation argument
The central idea of those in favour of leaving is that, with a currency of their own like the former peseta, they could devalue to make exports cheaper. It sounds good on paper, but history shows that 99% of the population ends up paying the price. Devaluation is not an industrial policy; it is a silent tax on the purchasing power of wages. Exporters win, families lose.
The inflation they don't talk about
Today's inflation was not caused by the euro, but by expansionary policies and speculation in the markets. Those who long for the peseta seem to forget that, under it, crises turned into inflationary spirals that devoured savings. The euro, with all its flaws, has served as an anchor against such episodes. Saying otherwise means ignoring the evidence or having very specific interests.
At the opposite end, there are those who point out that the euro has been neither a panacea nor a protection against the loss of purchasing power. But replacing it with a politically managed currency would be a leap into the void. The lesson of Venezuela is not exportable, but it serves as a warning: when monetary policy is subordinated to demagoguery, disaster is guaranteed.
The euro is not perfect, but the known alternative is worse. The debate, at its core, is not about currencies, but about who pays for the damage. And history has already given the answer.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (37 replies).
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