One reason for being optimistic about the fate of the euro is that leaving the monetary union would be a dramatically disastrous event for every one. Barry Eichengreen has written the definitive description of what that would entail. Greece, if it were to leave, would see its new currency sharply depreciate, which could double up in local currency terms its already suffocating public debt and bankrupt millions of Greek private debtors, households and corporations alike.
–Charles Wyplosz, Letter Opposing the Motion, “This house believes the euro area will fragment over the next ten years”. The Economist on-line.
I beg to differ. This is very difficult because I’m citing monetary union during the Great Depression as an object lesson, and Eichengreen wrote the book on that dimension of the Depression. Nevertheless I have to speak out. This language — “leaving the monetary union would be a dramatically disastrous event for every one” — is conjectural. That it is stated so unequivocally reminds me of the dogmatic defence of the gold standard. Have a look.