Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Again, the euro is not the problem.

And what, precisely, makes the Euro differ in this respect from every other currency union in the history of currency unions?

It is possible to do left wing policies and solidarity with a strong currency

It is possible to do left-wing policies and solidarity if you view the "strength" or "weakness" of the currency as an incidental and largely unimportant byproduct of one's overall industrial policy. It is not, however, possible to do left-wing policies when one is bound to defend a strong currency, so-called, for no reason other than to defend a strong currency, so-called.

and limited public debt.

Again, only as an incidental circumstance, not when you elevate it to the status of coequal (nevermind primary) policy objective.

How would the 40-80% cut in wages that most workers and pensioners suffer in a disorderly devaluation be any better than the current ordeal?

(a) they won't. 40 % is the upper bound on the amount of depreciation required to restore unit cost parity.
(b) a depreciation of the currency is shared between workers and savers alike, even under the ceteris paribus assumption. And the point of floating the currency is to gain the ability to implement aggressive full-employment policies, so you are looking at a case that is more worker-friendly than the ceteris paribus case.
And (c) the current policy regimen being imposed on countries who fail to take adequate measures to protect their sovereignty from the Bundesbank will keep destroying until there is nothing more to destroy or sovereignty is reasserted. The latter carries a considerable risk of substantial violence. The former carries a guarantee of even more substantial violence.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Mar 17th, 2012 at 09:06:27 PM EST
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