American Thinker
Alex Alexiev
June 5, 2018
At the time Italy joined the European Monetary Union (EMU) in 1999 on its way to full-fledged membership in the eurozone in January 2002, economists debated whether this never-tried-before experiment will succeed or not. One of the most compelling debates at the time was between two giants of monetary thought, Robert Mundell and Milton Friedman. Mundell, who is occasionally referred to as the ‘father of the euro’, for having laid out the theoretical foundations of a common currency, was optimistic, Friedman, the opposite.
Friedman is now dead while Mundell is 85, but the events in Italy may be bringing us closer to a resolution of the argument. So it is worth remembering the key points made by the two luminaries. Mundell, of course, pointed out the numerous and rather obvious benefits of a common currency, such as the dollar in the United States, Friedman believed that the “political consequences of a monetary area that is not coterminous with a political entity†would result in instability. He also believed that Europe had too many rules and regulations and lacked sufficient economic freedom to make the experiment successful. More fundamentally, though, he argued that the euro was an effort to achieve political objectives by economic means and that, more than anything else, doomed it to failure.
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https://www.americanthinker.com/articles/2018/06/italy_and_the_end_of_the_euro.html
