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The Dynamic that Threatens the Stability of the Euro

Eurozone members have given up their national currencies and adopted the Euro. In doing so they have forfeited  their fiscal spending capacity to manage their economies and respond effectively to external shocks. Austerity in the face of economic downturns is not a choices for Eurozone members, but a necessity. The Euro as a 'stateless' currency does not make any sense, because it cannot be employed to pursue countercyclical  policies, a primary and necessary policy instrument of modern  democratic governments. The CLD shows how the  pernicious dynamic that arises from these


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