Over the next few years, the debate about whether or not to remain in the euro will rage in countries like Greece, Italy, Spain, Ireland and Portugal. Opponents will argue that each country must ditch the euro and regain monetary sovereignty or it will be condemned to rising unemployment and stagnation.
Proponents will counter by insisting that retaining the euro is the only way to protect domestic and monetary fiscal credibility. By leaving the euro and devaluing their national currencies, they claim, the afflicted European economies will simply condemn themselves to many years of economic stagnation.
A similar debate took place in France nearly a century ago that may illuminate the problems Europe faces today. After the first world war, which wreaked havoc on the monetary arrangements of the pre-war years, France struggled over the issue of what to do with its currency.