German Chancellor Angela Merkel has stated repeatedly that there is no alternative to the euro. She is right—up to a point. Today, people inside the euro zone do not have any alternative to the euro for an all-purpose currency, but that is because governments have barred any alternatives.
Chancellor Merkel and many other European leaders want to defend the euro at any price, calling the single currency the foundation for the rise of a “United Europe.” The opposite is true. The euro is, in fact, one of the major causes of the problems besetting Europe today. And things could still get worse. Maintaining the currency union in its present form may cause the breakdown of Europe’s single market over the long run.
Is there a solution? Yes. The basic principles of the common market could save the European Union, if they were applied to monetary policy. Europe’s currency future lies in competition.