EU Monetary Union Under Fire as Economists Warn of Catastrophic Consequences

The European Union's monetary union has long been considered an irreversible process, but recent events have raised questions about its sustainability.

Economist Gabriele Pinosa argues that the euro's weakness is not inherent to the currency itself but rather a result of Europe creating a monetary union without completing the necessary political, fiscal, and institutional architecture.

The Eurozone does not meet the conditions for an optimal currency area, according to Pinosa. Linguistic, cultural, and regulatory differences limit labor mobility, while social policies and public spending remain largely the responsibility of individual states.

If a country were to leave the euro, the process would be largely financial and legal, with the adoption of a new national currency as legal tender and markets assigning it a new value. The main problem would not be banknotes but banks, deposits, contracts, and debts.