A warning from the past: N. Kaldor on the Eurozone

Posted on August 20, 2012 by yanisv

They say that bright minds see well into the future, unimpaired by models, simulations and computational statistics. As evidence of this, consider the following lines from 1971. They was written by Nicholas Kaldor, a highly esteemed Cambridge economist who passed away in the mid-1980s. Discussing the prospect of a United States of Europe, which he did not oppose, he nevertheless warned:
“But it is a dangerous error to believe that monetary and economic union can precede a political union or that it will act (in the words of the Werner report) “as a leaven for the evolvement of a political union which in the long run it will in any case be unable to do without”. For if the creation of a monetary union and Community control over national budgets generates pressures which lead to a breakdown of the whole system it will prevent the development of a political union, not promote it.”