The eurozone is a political project, not an economic one If you try to understand the eurozone as an economic policy idea, you'll quickly start to see that it's a pretty stupid idea. Ncomputing vspace for windows 7server6 6 9 1 zip2812486 download. That will lead naturally to the conclusion that its architects were stupid people, and that the policymakers in Brussels and Frankfurt who oversee it today are also stupid people. And if you try to understand everything that's going on through the lens of stupid people doing stupid things, you'll end up misunderstanding the situation.

The single most important thing to understand about the eurozone — the group of 19 European Union member states who use the euro as their official currency — is that it's primarily a political project, not an economic one. And despite the considerable problems with European economies, it gives every indication of succeeding in its political goal of pushing deeper and deeper integration of European countries. Ireland's main trading partners are the United States and the United Kingdom. Finland's main trading partners are Russia and Sweden. Economics simply can't explain why they would want to be in a currency union with Italy and Portugal and Greece. () The eurozone's member states — Portugal, Spain, France, Luxembourg, Belgium, the Netherlands, Germany, Italy, Austria, Ireland, Finland, Cyprus, Estonia, Malta, Greece, Slovakia, Slovenia, Lithuania, and Latvia — have all forsworn sovereign control over monetary policy and handed it over to the European Central Bank in Frankfurt. The ECB sets interest rates, controls the quantity of euros in circulation, and generally performs for its members the functions that the Federal Reserve does for the United States or the Bank of Japan does for Japan.

As an economic policy, this is an idea with some serious flaws. The eurozone is not what economists call an optimal currency area — its economies are too big and disparate. One way this flaw plays out is that Europe has very limited labor mobility compared with, say, the United States. If the economy is strong in the Netherlands but weak in Spain, it's difficult for Spanish people to simply move to Amsterdam, as they don't speak Dutch.

European countries maintain separate welfare states, and have very different average living standards. Consequently, economic conditions can be very different in one part of the eurozone than in another, making it difficult for the ECB to create policy that is appropriate everywhere. These problems are why economics writers fall all over themselves these days to come up with stronger condemnations of the eurozone's fundamental flaws. It 'a doomsday device for turning recessions into depressions,' which is pretty good. But European Economic and Monetary Union isn't a blunder, it's an incredibly ambitious political idea. In the late 1940s and early 1950s, European leaders decided that World War II was not just a uniquely horrible event but the culmination of a centuries-long process of great-power rivalry. They committed to the construction of a series of institutions — first the European Coal and Steel Community, then the European Economic Community, then the European Union — that would make war impossible.