Paul Krugman in the NY Times argues it is high time to ditch the euro: Europe’s Economic Suicide.
[I]n the 1930s — an era that modern Europe is starting to replicate in ever more faithful detail — the essential condition for recovery was exit from the gold standard. The equivalent move now would be exit from the euro, and restoration of national currencies. You may say that this is inconceivable, and it would indeed be a hugely disruptive event both economically and politically. But continuing on the present course, imposing ever-harsher austerity on countries that are already suffering Depression-era unemployment, is what’s truly inconceivable.
Krugman subsequently spoils his new-found clarity by arguing that once national currencies are re-introduced, the Continent needs more expansionary monetary policies. I.e., countries should run the money presses to excess. You know, the usual, utterly dysfunctional ultra-Keynesian blather that is wrecking our economy as we speak.
But if even an ultra-Keynesian like Krugman is saying the euro is bad, it really must be a most dreadful currency. Time to end it, methinks