TY  - JOUR
AU  - Eichengreen, Barry
TI  - The Breakup of the Euro Area
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13393
PY  - 2007
Y2  - September 2007
DO  - 10.3386/w13393
UR  - http://www.nber.org/papers/w13393
L1  - http://www.nber.org/papers/w13393.pdf
N1  - Author contact info:
Barry Eichengreen
Department of Economics
University of California, Berkeley
549 Evans Hall 3880
Berkeley, CA 94720-3880
Tel: 510/642-2772
Fax: 510/643-0926
E-Mail: eichengr@econ.Berkeley.edu
M1  - published as Barry Eichengreen. "The Breakup of the Euro Area," in Alberto Alesina and Francesco Giavazzi, editors, "Europe and the Euro" University of Chicago Press (2010)

AB  - The possibility that the euro area might break up was being raised even before the single currency existed.  These scenarios were then lent new life five or six years on, when appreciation of the euro and problems of slow growth in various member states led politicians to blame the European Central Bank for disappointing economic performance.  Highly-placed European officials reportedly discussed the possibility that one or more participants might withdraw from the monetary union.  How seriously should we take these scenarios?  And how significant would be the economic and political consequences?  It is unlikely, I argue here, that one or more members of the euro area will leave in the next ten years; total disintegration of the euro area is even more unlikely. While other authors have minimized the technical difficulties of reintroducing a national currency, I suggest that those technical difficulties would be quite formidable.  Nor is it certain that the economic problems of the participating member states would be significantly ameliorated by abandoning the euro.  And even if there are immediate economic benefits, there would be longer-term political costs.
ER  -