Originally conceived as part of a unifying vision for Europe, the euro is now viewed as a millstone around the neck of a continent crippled by vast debts, sluggish economies, and growing populist dissent. In Europe’s Orphan, leading economic commentator Martin Sandbu presents a compelling defense of the euro. He argues that rather than blaming the euro for the political and economic failures in Europe since the global financial crisis, the responsibility lies firmly on the authorities of the eurozone and its member countries. The eurozone's self-inflicted financial calamities and economic decline resulted from a toxic cocktail of unforced policy errors by bankers, politicians, and bureaucrats; the unhealthy coziness between finance and governments; and, above all, an extreme unwillingness to restructure debt.
Sandbu traces the origins of monetary union back to the desire for greater European unity after the Second World War. But the euro’s creation coincided with a credit bubble that governments chose not to rein in. Once the crisis hit, a battle of both ideas and interests led to the failure to aggressively restructure sovereign and bank debt. Ideologically informed choices set in motion dynamics that encouraged more economic mistakes and heightened political tensions within the eurozone. Sandbu concludes that the prevailing view that monetary union can only work with fiscal and political union is wrong and dangerous—and risks sending the continent into further political paralysis and economic stagnation.
Contending that the euro has been wrongfully scapegoated for the eurozone’s troubles, Europe’s Orphan charts what actually must be done for the continent to achieve an economic and political recovery.
Martin Sandbu has been writing about economics for the Financial Times since 2009. Formerly the newspaper’s economics leader writer, he currently writes the newspaper’s Free Lunch premium economics newsletter. Previously, he was a senior research fellow at the Zicklin Center for Business Ethics Research at the Wharton School of the University of Pennsylvania. He is the author of Just Business: Arguments in Business Ethics.
"Refreshingly eccentric."--Wolfgang Streeck, London Review of Books
"Well-written and closely argued, Europe’s Orphan ought to delight the smarter supporters of European integration and will challenge some long-held assumptions of their euroskeptic opponents, not least the perception that the currency union has gnawed away at the international competitiveness of the eurozone’s weaker economies."--Andrew Stuttaford, Wall Street Journal
"[A] stimulating and entertaining book. . . . [Sandbu] has performed a public service by challenging the present dreary consensus on the fate of the euro and, in his final chapter, by reminding us what the single currency was for."--Richard Lambert, Prospect
"Financial Times writer Sandbu (Just Business) looks past current headlines to the ideals and realpolitik strategy behind the Eurozone, arguing that it remains Europe’s best hope for preserving global relevance. . . . The book cogently explains why scapegoating the euro for Europe’s economic and political disunity is nonsense."--Publishers Weekly
"Books that attack the conventional wisdom are refreshing. They force us to rethink. That is what Martin Sandbu’s Europe’s Orphan does--and what makes it stand out in the increasingly crowded field of eurocrisis analysis. . . . Europe’s Orphan is a stimulating and important book."--Paul De Grauwe, Financial Times
"[T]his is . . . a highly intelligent, thought provoking book, to be read by anyone who follows contemporary macroeconomic policy."--Tyler Cowen, Marginal Revolution
"Martin Sandbu’s book is a robust and generally well-informed critique of the handling of the euro-area crisis."--Patrick Honohan, Irish Times
"The book provides a sophisticated 'liquidationist' alternative to the dominant rhetoric."--Martin Wolf, Financial Times, a FT Best Book of 2015