While the bankruptcy of Greece is now more and more apparent even to those who believed that states cannot go bankrupt, the Euro as a currency is seen in a more and more critical light. Even a lot of people who once were strong supporters of the European currency, start to think about whether it was a good idea to start this project. The old national currencies are probably more popular today than they were shortly before they were abolished. Especially the British public and a lot of libertarians seem to be glad and proud that Britain stayed out of this crazy project.
From a socialist and maybe from an extreme nationalist viewpoint this certainly makes sense. But does it make sense from a libertarian viewpoint? Observing what is going on in Europe today, there is a strong argument that Britain would be in better shape today if they had joined the Euro.
Of course the Euro itself is everything but a libertarian project. It is a paper currency that is backed by nothing and controlled by a bureaucratic central bank. It therefore essentially establishes a planned economy over the territory in which it is used as legal tender. Like any planned economy it leads to a massive destruction of wealth followed by political crises and a continual loss of freedom.
Nevertheless, the old national currencies also where nothing but paper money currencies and in that sense not better than the Euro. Even supporters of the Pound need to admit that Britain is in a similar crisis at the moment as the Euro zone. So if the Euro and the Pound are similar currencies, why bother at all, which currency is used by the government.
Well, there is one big difference between the Euro and the Pound and that is the bureaucrats that are controlling the currency. The Euro zone consists of a lot of different states that are essentially fiscally autonomous. Because they are fiscally autonomous they have different interests of what should happen to the Euro. Of course, that in itself is not necessarily a good thing. Precisely for that reason the Germans for example currently condemning the day that they allowed their politicians to abolish the Deutsche Mark. Thanks to the Euro the German taxpayer now has to help Greece and other European states in order to bailout German and French banks that would otherwise lose a lot of money. It is not that Germany has some kind of better political system. Germany has a huge welfare state that in the end will go bankrupt like every other such system. But the Germans could get away with that for another maybe 20 years before they have to face this truth.
However, things look a bit differently from a British perspective. Britain is already bankrupted. In fact, Britain is so bankrupted that the state cannot even find a lot of people anymore, stupid enough to buy its gilts. The Bank of England has to monetise new British dept. Simultaneously, it keeps interest rates at an historic low to prop up house prices, a policy that is helping out a few rich property owners on behave of the more pour people.
From a libertarian point of view this is the worst policy. It allows politicians to keep up the illusion that the welfare state works. No real reforms need to be made. The problem can be covered up with inflation, destroying even more wealth without touching the ruling class too much. There is no real opposition to these policies in Britain, since all political parties have an interest to continue buying their voters. However, if Britain was in the Euro, politicians in this country would face a strong opposition to these policies by countries like Germany who have a short term interest in keeping the Euro strong. Ultimately of course, the inflation of the Euro is inevitable. After all, it is not a good currency. But this inflation would not come unconditionally. The Greeks for example now have to face the truth that the system needs some radical reforms, all thanks to the Euro. It would have been beautiful to see British politicians being forced to admit that the current system is wrong and needs a radical reform. They would have been forced to cut spending, not just a little bit like at the moment, but massively.
At the end it must be said, that the Euro is of course not an ultimate solution to the British welfare state. The absolute best thing would have been to abolish the Pound and replace it with nothing, so that the market can decide what it wants to use as currency. That is what ultimately has to happen, if this country wants to have a bright future.