- The Eurozone: Optimal Currency Area or Incomplete Monetary Union?

Catalog description

Before 2010, the Eurozone was hailed as the first successful multi-national, large-scale model of monetary and currency union. Several countries in many regions of the world (such as South America, the Middle East, West Africa) have been considering following in the steps of the European Union (EU) by creating similar currency areas in the near future. However, the financial crisis of the late 2000s followed by the sovereign debt crisis of the 2010s have challenged the perception of the Eurozone has a fully functioning currency area. In this class we will seek to place the creation of the Eurozone in the context of the broader evolution of the EU as a cosmopolitan project. We will examine the socio-economic theories and political ideologies behind the creation of the Eurozone. This will require an understanding of the macroeconomic models which underlie the concept of ‘optimal currency area’ and an investigation of the degree to which the Eurozone is a fully completed project. In particular the solutions provided by EU leaders and institutions to the economic crisis in Greece (and other countries in the Eurozone) will give us a chance to reflect upon the future of the Eurozone and to discuss the intellectual and practical implications of two alternatives that member-states may face as they look towards the future of the EU: 1. the pursuit of further EU integration through the creation of a supranational fiscal and political union or 2. the beginning of a process of political and economic devolution towards smaller scale European projects.